1 February 2013

Namibia: Namibre Financials Being Rectified - Daxa

THE Namibia National Reinsurance Corporation Ltd (NamibRe) this week said the reason why its 2011/12 audit report is still outstanding is because debtors' balances and foreign currency transactions still need to be rectified.

Board chairperson Maria Dax ascribed the delay in the finalisation of the audit report to a skills deficit in the company caused by the resignation of two managers that left a gap in the corporation's operations.

She said technical personnel responsible for preparing information for the audit are young qualified Namibians who are attached to NamibRe for only one year.

"None of them had reinsurance skills when they joined. NamibRe decided to fill these vacancies with Namibians and not recruit from outside Namibia. Despite their lack of technical skills in reinsurance, it was hoped that with training they should pick up the technical skills fast on the job," Dax said.

On Monday The Namibian reported that the NamibRe board last October approved the use of Francois Francis, a former manager, on a consultancy basis to assist the technical staff to get the requisite information to finalise the audit.

Sources indicated that Francis was paid over N$100 000 for the job. The sources also claimed that the external assistance "did not help; it was a waste of money".

Francis on Tuesday acknowledged that he was approached by the NamibRe board to assist because of his four years' experience at NamibRe, but denied that he was paid more than N$100 000 as was reported.

He further stressed that he only helped out at NamibRe for a brief period, saying that a consultancy firm was in fact given the job.

Francis further took issue with the sources' claims that the external assistance "did not help", which he said badly reflected on his professionalism.

The sources said the external assistance could not have been of any help because the requisite documents were not up to standard.

NamibRe managing director Anna Nakale-Kawana said the corporation engaged an IT company at the end of last year to assist with the reconciliation of both technical financial accounts and reinsurance transactions captured on the Access system.

"The IT company is the one which maintains the NamibRe Access system and has technical know-how on the processing of the data in the data in the system. It was for that reason [that NamibRe] requested to team up with NamibRe staff for reconciliation of data purpose," Nakale-Kawana said.

She said NamibRe paid this company N$148 053,87, and that Francis was in the team of the consulting company.

Dax in a statement said the board discussed the financial report last Friday, and briefed Finance Minister Saara Kuugongelwa-Amadhila on Monday.

The minister was informed in September last year that the company's annual financial statements had been delayed, Dax said.

"This is the first time for NamibRe to experience problems with its audits since its establishment in 1999. This is a sad situation that both the board and management has undertaken to address following this audit as it may influence the excellent credit rating of NamibRe," the statement read.

Dax said despite the disclaimer of opinion by Ernest & Young, NamibRe's profit for the year rose from N$15 million to N$19,8 million.

"The corporation has been making profits since inception and this trend is ongoing. The auditors confirmed that out investments, bank and cash and fixed assets are intact and have not been affected by the problems experienced. Most importantly, the auditors confirmed that NamibRe is a going concern and that problems that we are experiencing are temporary and can be rectified. We have not found evidence of fraud or theft to date," Dax said.

She said the board had identified and was fully aware of the problems, and had put in place mechanisms to rectify the situation "in the shortest possible time".

"Our technical partners in reinsurance have been engaged to assist in this regard. The organisational structure is to be strengthened, making sure that it is responsive to the needs of the corporation and that it can meet the strategic objectives of NamibRe," Dax said.

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