Monday, October 25, 2021

BR union questions findings of Deloitte forensic audit report

The first thing that the leadership of the Botswana Railways Amalgamated Workers Union (BRAWU) rejects is the idea that it led the Ministry of Transport and Communications “on an expensive wild goose chase.” The latter is Sunday Standard’s editorialisation regarding the conclusion of a forensic audit report that cleared Botswana Railways management of both corruption and maladministration. The audit exercise followed an investigation that had been ordered by then Permanent Secretary in the ministry, Mabua Mabua.

Tsenang Nfila, who is BRAWU’s Executive Secretary, says that while Mabua’s investigation committee came at the instigation of the union, the latter had nothing to do with the forensic audit which was ordered by BR’s Board of Management.

The second point BRAWU makes comes courtesy of Letlampona Mokgalajwe who no longer works for BR but is relevant to the story because he was an office holder at the time of the two investigations. An artisan, he makes the argument that the auditors appraised issues presented to them from an accounting and not mechanical perspective.

At the time of the audit (2011), BR had entered into contractual agreements with external contractors to render maintenance and repair services to its fleet. In terms of these agreements, BR provided free replacement parts that are required by the contractors and a part is replaced when it is irreparably damaged. These contractors were located in South Africa and Zimbabwe.

BR wanted its old spare parts back but that proved problematic. The contractors requested BR to collect those parts but that “created Value Added Tax (VAT) complications at the Botswana Customs and Excise when the parts were transported across the border back to Botswana.” The other complications started on the other side of the border. Packaging and transporting the parts came at a cost that contractors expected BR to bear. If the parts were not collected, BR incurred a storage fee. To get around this problem, BR decided to sell off such parts as scrap.

In the course of its investigation, Deloitte contacted the contractors but one (Emily Masilela) at Transnet Rail Engineering in South Africa was not particularly helpful. When the investigators asked her if there were any spare parts for BR locomotives at the TRE workshop, Masilela had her own request: put your request on paper.

“To date we have not had a reply from Ms. Masilela,” says a Deloitte forensic audit report, meaning that six months had gone by with no response from Transnet.

Mokgalajwe’s own conclusion is that Transnet didn’t respond because it was benefitting from this arrangement, most likely using the old parts on its own trains. The audit report merely makes mention of spare parts but Mokgalajwe says that the parts in question are very expensive. Some he names range anywhere between P500 000 and P1 million in price.

“There is definitely something that Transnet was hiding. This was an arrangement that had been in place for a long period of time and one in which the company was definitely benefitting from,” says Mokgalajwe who also questions the basis upon which such parts were scrapped off. “The auditors were looking at the book value of the parts and not at the market value.”

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