Search
Sunday 21 April 2019
  • :
  • :

NBC monthly sub reduced by N$16 million

… as auditors report show untrue reflection of financial position

 

Namibia Broadcasting Corporation employees have been asked to increase their saving efforts as the company is expected to add another hole in its belt following their April budget being reduced from N$22 million to N$6 million.
NBC spokesperson Umbi Karuaihe-Upi confirmed the reduction to The Patriot, but referred the ‘why’ question to the Ministry of Information and Technology.
Public Enterprises Minister Leon Jooste said that he is not aware of the reduction and also referred all further questions to the information ministry.
The Ministry of Information and Technology were yet to respond to questions regarding the reduction at the time of going to print.
Employees who did not want to be named told The Patriot that they were informed via email that they have to increase their efforts of saving in order for the national broadcaster to make ends meet.
Some said that the reasons for the reductions is because of how poorly the broadcaster performed during the last audit report.
The Namibia Broadcasting Corporation’s financial statements do not give a true and fair view of the national broadcaster’s financial position and cash flows, a 2017 audit report by Auditor General Junias Kandjeke has found.
The audit report signed September 2018 was for the period ending 31 March 2017.
Among the various financial questions raised by the Auditor-General, the audit report pointed the basis of Kandjeke’s conclusion being the unreconciled leave pay provision of N$2 854 031, unreconciled Pay As You Earn balance of more than N$6,1 million, under declaration of sales to the tax directorate worth more than N$60,5 million and foreign purchases being recognised at incorrect exchange rates.
He further based his opinion on the records of unknown deposits of more than N$693 million, unreconciled negative debtors of more than N$4 million, unexplained provision of financial clean-up account amounting to N$64 465 650.
The Auditor-General also listed an under-statement of depreciation by more than N$3 million and an under-statement of accumulated loss as result adjustment to depreciation of the N$37 million, as basis for his audit opinion. The office of the Auditor General in a 2017 audit noted that 83% of the broadcaster’s liabilities were statutory obligations, but that the corporation did not settle the liabilities on time “and thus not adhering to statutory requirements. Medical aid and Pay As You Earn were not paid from January to March 2017.”
In its key audit findings, the audit report states that while the auditors noted that the broadcaster’s management sought authorisation from the board to reinstate the post-retirement medical liability, they could not verify whether the NBC management sought for other adjustments on the financial statement.
The Auditor-General said that in some of the areas the auditors could not establish whether authorisation included employee leave provisions, penalties and interest on import account, Value Added Tax with the Receiver of Revenue, equipment, motor vehicle cost, land and building cost as well as computer and office equipment cost – to name a few. Some of the amounts went as high as N$287 535 242.
The report recommended to the broadcaster to ensure that authorisation is sought for the changes to financial statements.
The report also recommended to NBC that they adhere to international accounting standards when it comes to the effect of change in an accounting estimate.
The audit report indicated that the corporation affected change in estimates retrospectively in its books of accounts while the International Accounting Standards 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ provides that such changes should be recognised prospectively.
It was largely reported in the media last year that NBC staff were complaining about being deducted for medical aid and other benefits, but that it was not being paid to the third party.
The latest audit report on the corporation stated that the auditors observed that while NBC recognised the post-retirement medical aid benefit and the severance pay liability of N$313 176 000 and more than N$4 million respectively, there were no specific assets set aside by the corporation to fund the liabilities which means that the plans are not funded.
Another issue highlighted was that the wrongful calculation of depreciation on their fixed assets resulted in the depreciation charge being under-stated by N$3 272 360.
“The auditors also noted that some of these assets are still not tagged, as the Corporation is yet to finalise the tagging exercise,” the report reads.

Tax irregularity
The audit report recorded a difference of N$60 529 850 between sales declared to the revenue authority and the sales disclosed in the annual financial statement.
The report states that the vat-able sales disclosed in annual financial statements were more than sales declared on the VAT returns by more than N$38,8 million.
“It is recommended that the Corporation should declare all vat-able income as required by tax regulation,” the report reads.
Mbeuta Ua-Ndjarakana, Executive Director and Accounting Officer of the Ministry of Information and Communication Technology confirmed the reduction and said that this may change along the line. He said that the reduction is as a result of the economic troubles the country is facing.
“Even in a household, if you used to give two pieces of meat, you would now only give one as long as there is relish”.
He added that the national broadcaster is not complaining about the reduced monthly subsidy.
The broadcaster’s budget was reduced from about N$360m to N$250m for the 2016/17.

The budget was further reduced in the 2017/2018 financial year and both management and board chairperson Sven Thieme in the past said that the budgets contribute severely to their financial woes. The broadcaster this year received N$130 million.




Leave a Reply

Your email address will not be published. Required fields are marked *