In the last seven years, the joint-stock company Post of North Macedonia has continuously made losses, deviates from European standards for the provision of postal services, has a bunch of loans, procures without conducting public procurements... These are only part of the findings of the State Audit Office.

The auditors also concluded that "in September 2023, despite the continuous negative financial result, the company increased the monthly net salary of the directors of departments, the deputy general director and the general director by 42% to 58% respectively". This means that Bujare Abazi, who assumed the position of general director and president of the Board of Directors on March 13, 2023, immediately got down to work - she increased her salary, but also distributed higher salaries to first-echelon employees. At the end of 2023, Posta ended up with a negative result of 2,2 million euros! The auditors remind that this is contrary to the Law on Commercial Companies, which decisively states: "In the event of reduced profit or a significantly worsened financial situation of the company, the salary compensation and other benefits, provided for in the management contract, may be reduced."

In seven years accumulated loss of 17 million euros

In the Report it is noted that the continuous losses negatively reflect on the current and future operations of the company, do not allow its development and call into question the efficient, permanent, orderly and quality performance of the activity as a public operator in the internal and international postal traffic.

Since 2017, as of 2023 AD Posta has accumulated a total loss of around 17 million euros. Before that, there were years of gains and there were years of loss. In the continuous period of losses, the worst year is 2022 in the amount of over 3,7 million euros.

In the event that the costs are higher than the income generated from the provision of the universal service in the previous year, AD Post of North Macedonia has the right to compensation from the Compensation Fund, but in order to exercise this right, it must keep separate accounting for the universal service, for the reserved services , as well as for other postal services it provides. The auditors determined that such accounting has not been established, which is why so far no request has been submitted to the Agency for exercising the right to reimbursement of net costs.

Untimely delivery of shipments

The auditors made an analysis of the quality of the services covered by the universal service and determined untimely delivery of shipments. In 2023, 59,7 percent of shipments were delivered on the first day, while 30,5 percent were delivered in a period longer than three days.

"These results indicate a deviation from the goals set by the World Postal Union, which prescribes a minimum standard of 75% and a maximum standard of 88% for successfully and timely delivered shipments, say the auditors," SAO writes.

In 2023, the Postal Agency conducted a survey on the satisfaction of users of postal services and 79 percent of citizens and 80 percent of forms declared that the speed of delivery of parcels was the main reason why they chose another postal operator.

Very often the news that there are not enough postmen is published in the public. But the SAO reveals that "the company has concluded contracts with 276 mail carriers, but some of them, instead of the contracted services, are hired to perform other administrative tasks."

Up to the throat in loans and interest

The company faces a large debt based on loans, credits and accrued interests, which are not serviced in a timely manner, which further worsens the financial situation and disrupts liquidity, the auditors say. The total liabilities for short-term credits and loans at the end of 2023 amount to 3,6 million euros, and refer to a short-term loan taken from MEPSO - AD for the transmission of electricity in the amount of 1,6 million euros and two short-term loans from commercial banks in a total amount of 2 million euros. For the due and unpaid loans in 2024, a contractual penalty interest of 24,45% or 109.000 euros has been calculated.

"All the loans taken have a high interest rate, ranging from 4,8% to 6,25%," the State Audit Office pointed out.

The Law on Postal Services stipulates that postal service providers pay an annual fee to the Postal Agency. For the year 2023, Posta was supposed to pay 380.000 euros, but due to financial difficulties, the company untimely settled these obligations, which resulted in an interest of over 32.000 euros.

795.000 euros were paid for a study on better performance

The Ministry of Transport has not adopted a Strategy for the development of postal services, which should be adopted by the Assembly of the Republic of North Macedonia. In 2021, 795.000 euros were paid for the implementation of an in-depth recording of the operations of AD Post of North Macedonia and the preparation of a feasibility study. Although AD Post of North Macedonia has the completed study, it is not applied.

"With the performed audit, a number of other situations, irregularities and inconsistencies of a different nature were ascertained, which affect the expression of an unfavorable opinion on the reality and objectivity of the financial statements for 2023 and on compliance with the legal regulation." In order to overcome the ascertained conditions, recommendations have been made in order to take measures and activities by the competent persons and authorities in order to improve the conditions", the auditors conclude.