BPC brushes off audit findings
Mbongeni Mguni | Tuesday April 8, 2014 12:20
In his report for the year ended March 2013, the last before his retirement in June - the Auditor General, Robby Sebopeng notes “an apparent lack of meaningful progress,” in resolving prior year audit findings. Of the 53 audit concerns pinpointed by Sebopeng in the 2012 audit, the BPC only resolved 15 with 27 unresolved and 11 partly resolved. “This situation exposes the Corporation as it may ultimately suffer financial losses,” Sebopeng notes in his latest report released last Thursday.
Some of the problem areas for the Corporation include billing, where a 2012 software crisis around the smart meter migration saw customers receiving exorbitant bills, which forced then energy minister, Ponatshego Kedikilwe, to weigh in.
The crisis, stemming from 2010, saw the BPC billing customers on estimated usage instead of actual, resulting in some domestic consumers receiving bills running into thousands of Pula for a single month’s consumption. The Auditor General revealed that for the year ended March 31, 2013, the BPC billed customers P25.9 million based on estimates – instead of actuals – for a continuous period of more than 12 months.
“The Corporation’s policy dictates that customers should not be billed based on estimates for more than three billing periods without investigating the reasons and ensuring that actual meter readings were obtained and used to enhance the accuracy of billing,” Sebopeng writes.
Other issues spotted by the Auditor General include an erroneous double payment of 11.43 million South African Rands to a supplier in August 2012 that had not been refunded by March 2013.
Sebopeng’s findings of sloppiness in the BPC’s finances, come as the Corporation revealed a P1.25 billion loss for the year ending March 2013, up from P1.12 billion. According to the Auditor General’s report, the loss is after a P871 million tariff subsidy awarded by government during the year in review. Last year, government pumped P1.49 billion into the BPC via a supplementary budget and transfer from within the ministry, and is set to inject a further P1.5 billion this year as a subsidy.
The funding has allowed the Auditor General to move the BPC from being in danger of losing its ‘going concern’ legal requirement, to ‘dependent on continued government support’.
The BPC is statutorily required to operate as a going concern with its Act specifying that it should conduct its affairs on ‘sound commercial lines and produce a net operating income by which a reasonable return can be measured’.