AG could have opined on NEPC finances

AG could have opined on NEPC finances

Staff Reporter

Windhoek-Auditor-General Junias Kandjeke yesterday told the National Assembly’s Public Accounts Committee that should he have had access to the volumes of evidence presented by New Era Publication Corporation (NEPC) management during a public hearing yesterday, he would have had an opinion on the company’s finances.

The NEPC management was hauled before the public accounts committee for a routine hearing where answers were sought on various issues raised in the recently released auditor-general’s report on the company’s finances.
The auditor-general issued a disclaimer in the latest audit report, meaning he did not have an opinion on NEPC’s finances because he was unable to obtain sufficient appropriate audit evidence when he audited the company for the financial years 2014/2015 and 2015/2016.

His concerns mostly centred around administrative issues such as the absence of supporting documentation, bank reconciliations, credit balances and operational revenues.

NEPC management, accompanied by some members of the company’s board of directors, yesterday delivered volumes of documents, packed in boxes, as evidence to issues raised in the audit report, for which the public accounts committee wanted answers.

It was stated that during the audit, a multitude of documents were not available at the time of the audit. Kandjeke yesterday accepted the new evidence presented and told the committee he would previously have had an opinion if he had had access to the information produced yesterday.

“I thank the NEPC management for its honesty. There’s nothing sinister in your submissions and if I had had access to these submissions, I’d have had an opinion instead of a disclaimer in my report,” he said.

Kandjeke did not reveal what his opinion would have been, but Mike Kavekotora, the committee’s chairperson, said his team would compile a new report to parliament to reflect the true state of NEPC finances based on new evidence.
Management informed the committee about control measures put in place, including discarding the old filing system from which crucial information could not be smoothly retrieved during auditing.

The committee expressed concern about the company’s financial position in general, which made it difficult to execute some regular functions such as honouring debts on time.

NEPC CEO Dr Audrin Mathe said the financial position was made worse by low capitalisation by the shareholder and the previous absence of proper governance tools at NEPC, such as key finance policies.

This, Mathe said, has since been rectified after more than 30 policies were put in place in recent years and risk audits conducted to plug holes. Funding remains an issue, he said, although NEPC is working towards financial self-dependence.

Currently, the company generates 75 percent of its own income, while the government’s subsidy accounts for 25 percent. This equation fluctuates, with government’s subsidy sometimes lower.

Although the government has significantly reduced its subsidy to NEPC, the corporation’s earnings remain on an upward trajectory despite tough market conditions. For the financial year ended March 31, 2016, the corporation’s revenue – excluding government subsidy, interest earned, and other income – stood at N$35.5 million, a 4.7 percent increase over the previous year’s revenues of N$33.9 million.

NEPC’s revenue for the 2015 financial year, excluding subsidy, interest received and other income, went up 19.5 percent over the N$28.33 million recorded in 2014. The profit for the 2015 financial year came in at N$4.83 million up from the N$1.82 million surplus recorded in 2014 after taxation. Asset base doubled from N$24.2 million in 2014 to more than N$50 million in 2016, according to Kandjeke’s reports on NEPC.

Revenue including other income and interests, but excluding subsidy, came in at N$36.1 million in 2016 and N$34.5 million in 2015.

Comparably, government’s subsidy between 2014 and 2016 was at N$13 million each year, minus the additional funds from Treasury in 2015 to cater for capital expenditure, which pushed up the subsidy to N$37.6 million for that year.

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