Auditors, appointed by Anacom to keep a check on the accounts issued by Portugal's privatised post office, concluded that CTT has been fiddling the books by apportioning costs to the postal service that in fact were incurred while setting up in-store branches of Banco CTT.
The regulator says the cost-sharing methodology used by CTT, between the various parts of the business, is inadequate and has allowed part of Banco CTT’s costs to be attributed to the universal postal service which allowed management to push for an increase in postal charges while making the bank's figures look better than in reality.
Grant Thornton & Associados raised the reservations and Anacom states that, "there is an inadequate distribution of expenses between postal and banking activities at the level of the commercial network (post offices)" and an "overvaluation of postal services expenditure, in exchange for an undervaluation of expenditure attributed to banking activity."
Anacom, which has issued a decision allowing it to issue a ‘statement of non-compliance’ with the 2016 results of CTT's accounting system and to recast it in 2016 and 2017.
CTT has a 20 business days in which to comment on the preliminary ruling that its management has been creative with the figures but needs to come up with a credible response as its contract to be the country’s universal postal service provider, which ends at the end of 2020, obliges the company to have an analytical accounting system that separates the "accounts between each of the services and products that make up the universal service and those that are not part of it."
Anacom adds some specifics about, “...an overstatement of postal service expenses, in return for an undervaluation of the expenses charged to the banking business, in particular as regards depreciation, amortization, rent and lease of tangible assets such as furniture and real estate, cost of capital, taxes and fees, insurance, maintenance and repair, water, electricity, cleaning and security and various consumables,” and said it first raised concerns in 2015 when the first Banco CTT branches opened.
On Feb 20th, parliament will be discussing CTT and its nationalisation. This Anacom statement is well timed to add more fuel to the fire.
