Suspicious transactions at BR

BAME PIET
Staff Writer | Thursday April 15, 2010 00:00

'It was observed that for some of these leases, signed lease agreements could not be produced, and in other cases where the lease agreements had been signed, it was noted that the rentals were not being paid'.

The AG cited an instance in which a memorandum of agreement between BR and Botswana Power Corporation (BPC) had been sent for signature in 2006 and it still has not been signed or returned to date.  'In another case, rentals had not been paid for railway siding by a user since the inception of the lease in December 1989. 

The last follow up on this latter case was made as late as November 2007.  The failure to administer these leases properly would result in loss of revenue'.

He said that in one of the transactions there was a discrepancy of P110, 000 that had existed for three years but no resolution was made and the management said it was a system error.

The AG noted with concern that BR Properties (Pty) Ltd, a subsidiary of the parastatal, operated without financial records despite the company's supposed independence from BR. The main company - BR - had agreed last year to separate the two and comply with the Company's Act.

 'It is with some disappointment that I have to report that this undertaking has not been honored, as the operations of the subsidiary continued to be managed from Headquarters as part of the holding company's operations'.

He said that the only accounting figure relating to the subsidiary was an amount of P2.33 million as a receivable on account of disbursements on behalf of the subsidiary.

'When I was ready to commence the audit, it turned out that there were no financial statements relating to the activities of the subsidiary, but I was informed that vouchers would have to be extracted from those of Botswana Railways at Headquarters'.

He said that the management has stated that they have engaged an attorney to draft an agreement, which would define the relationship between the two entities.

The AG also noted that projects under construction were not properly monitored to ensure that completed projects were transferred to fixed assets. 

'Nine such projects, with a value of P13.78 million, were noted to be in this category.  In response to my enquiry, the management stated that completion certificates to the value of P12.85 million for the Signalling and Telecommuniations projects had been received from user department and that the amount would be transferred to the respective fixed assets, but did not comment on the balance of P930, 000'.