NBC receives adverse audit opinion

01 Nov 2018 15:20pm
WINDHOEK, 01 NOV (NAMPA) – Auditor-General Junias Kandjeke has given an adverse audit opinion to the State broadcaster for its failure to provide financial statements that give a true and fair reflection of the institution’s financial position.
An adverse opinion is a professional opinion made by an auditor indicating that a company’s financial statements are misrepresented, misstated and do not accurately reflect its financial performance and health.
The information is contained in the Namibian Broadcasting Corporation (NBC)’s audit report for the 2016/17 financial year (FY), submitted to the National Assembly by Minister of Finance Calle Schlettwein on Tuesday.
Kandjeke found that the corporation recognised a post-retirement medical aid benefit and severance benefit of N.dollars 313.2 million and N.dollars 4 million respectively.
Ironically, it was found that NBC has set no assets aside to fund the two benefits.
To address this, he recommended that “the corporation should ensure to meet all its liabilities by setting aside funds to build an asset base to fund the benefit plan”.
Additionally, although a database of TV licence holders is in place, neither NBC nor auditors could rely on it as sufficient basis to determine revenue as validation checks on data are still to be done by the corporation.
The AG thus recommended that the NBC implement control measures that will ensure that “all registered users are invoiced”.
Also during the period in question, NBC’s fixed asset system was wrongly calculating depreciation, which was understated by N.dollars 3.3 million.
Plus, the auditors found that 83 per cent of the parastatal’s liabilities were statutory obligations.
NBC failed to settle these liabilities on time, thus not adhering to statutory obligations, the report further implicates.
“Medical aid, PAYE (Pay As You Earn) and pension contributions were not paid from January to March 2017,” the report stated and recommended that NBC ensures that it complies with statutory obligations of the country and remit third party payments.
Further, differences were noted between sales declared to the revenue authority and sales disclosed in the annual financial statement amounting to N.dollars 60.53 million.
“VATable sales as disclosed in annual financial statements were more than sales declared on the VAT returns by N.dollars 38 884 014,” the report reads.
Another finding is that a difference of N.dollars 6.2 million was noted between NBC’s tax report from the Receiver of Revenue and its financial record.
The auditors found that no reconciliations were done during the year under review, hence suggested that NBC should ensure that the PAYE account is reconciled to the control account.
The leave pay provision was overstated as well by N.dollars 2.9 million.
“In my opinion, because of the significance of the matter discussed in the Basis for Adverse Audit Opinion paragraph, the financial statements do not give a true and fair view of the financial position of the Namibian Broadcasting Corporation as at 31 March 2017,” Kandjeke concluded.