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PRASA hammered for irregular, wasteful expenditure

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Members of Parliament have asked the board and management of the Passenger Rail Agency (PRASA) what they are doing to fix the entity’s finances.

PRASA has been identified by the Auditor General as the worst performing entity with irregular, fruitless and wasteful expenditure to the tune of R14 billion.

The board and management of PRASA were appearing before SCOPA to account for the losses.

Scopa member David Ross, was lead questioner. He asked PRASA board chairperson Popo Molefe what he thought of the Auditor General’s findings.

Molefe agreed. But he pointed out that what they are dealing with is a legacy problem.

The company, he says, had helped uncover some of the irregular expenditure that helped the Auditor General’s findings, through the forensic investigation that it has constituted.

Ross also asked acting CEO Collins Letsoalo if he agreed that the entity had made no effort to prevent irregular expenditure and that there was no regard for legislative requirements among others.

“I think we should concede. There was a collapse of systems in PRASA in all areas, financial supply chain management control management had been non-existent. Where they were existent they were inadequate.”

Letsoalo also confirmed to the committee that their current PRASA’s finances are not healthy at all.

Asked whether they are complying with the government policy to pay suppliers within 30 days, he said they are struggling.

Inkatha Freedom Party (IFP) MP Mkhuleko Hlengwa wanted to know how wasteful expenditure of R218 million was incurred on a locomotive.

Letsoalo explained that it is one of the issues which are now before the courts.

“That became declared fruitless and wasteful because of the buying of a locomotive Afro 4000 which can’t be used because of various issues including the way they were procured that there was not contract as we say in our papers.”

[Source: SABC]
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