7 November 2018

Namibia: No Pension Plan for NBC Staff

THE Namibian Broadcasting Corporation has no finances set aside for its employees' post-retirement medical aid benefit and statutory severance pay for the 2017 financial year.

This was revealed in a report compiled by the auditor general, Junias Kandjeke, on the accounts of the Namibian Broadcasting Corporation (NBC) for the 2016/17 financial year.

The report revealed that although the corporation had recognised the post-retirement medical aid benefits and the severance pay liability of over N$313 million and N$4 million, respectively, the state broadcaster had no assets set aside to fund this liability.

Even though 83% of the NBC's liabilities were statutory obligations, the auditors stated that such liabilities were not settled on time, thus not adhering to statutory requirements.

The corporation did not provide medical aid, while Pay As You Earn and pension contributions were not paid from January to March 2017, the report states.

"It was also further observed that there were no specific assets set aside by the cooperation to fund these liabilities. Technically, these plans are not funded," the report states.

NBC's troubles with employees' benefits, medical aid and pension obligations were eased by the government earlier last month.

The corporation was bailed out with N$20 million in October after its employees went on a week-long strike, demanding that their benefits be paid.

The mismanagement of funds is not new at the NBC.

Last year, The Namibian reported how the state broadcaster failed to account for 2 000 decoders during the 2015/16 financial year.

The corporation also had no control over the television licence books, and revenue generated during that financial year.

The auditors thus told the corporation to ensure that it meets all its liabilities "by setting aside funds to build an asset base to fund the benefit plan".

Apart from unfunded guarantees, the auditors also discovered discrepancies with regards to the corporation's record-keeping on television licence income.

According to the report, TV licence income was recognised on bank deposits and amounts receipted.

It further stated that although a database of licence holders was in place, neither the corporation nor the auditors could rely on it as sufficient basis to determine revenue "as validation checks on data are still to be done by the corporation".

"Auditors were unable to determine whether any adjustments would be required in respect of unrecorded revenue and related elements making up the statements of financial position, statements of profit and loss, and other comprehensive income and changes in equity and cash flows," the report states.

The auditors also discovered that during the same year, the corporation's fixed assets system was wrongly calculating depreciation.

The depreciation charge was understated by N$3,2 million.

The auditors further observed that some of the assets are still not tagged, as the corporation is yet to finalise the tagging exercise.

Besides, Kandjeke's report said the NBC, during the year under review, overstated the leave pay provision by over N$2,8 million.

The auditors told the corporation to investigate the differences discovered to resolve them.

"Provision and control accounts should also be reconciled and reviewed regularly," the report reads.

"Auditors noted that the age analysis had unknown deposits of N$693 602 that were not allocated to the relevant accounts and negative debtors of N$4 million," the report states.

NBC spokesperson Umbi Karuaihe-Upi said they were surprised by the auditor general's adverse opinion.

She added that they were also "perplexed" as to why the auditor general "didn't see it fit to sit and discuss with the NBC the report before making it public, especially seeing that changes were made".

"We are as much in the dark about this matter - a letter seeking answers and clarifications has been forwarded to the AG's office," Karuaihe-Upi said.

Regarding TV licence troubles, Karuaihe-Upi said the corporation had made much progress with regards to the licence database and that strict control measures have been implemented to prevent the creation of duplicate accounts.

She, however, stated that there was a need for more "work to be done regarding the accuracy of the TV licence client database".

"The possibility of an underreporting of TV ownership does indeed exist. They, therefore, call on the members of the public to ensure that all TV sets in their possession are duly registered and paid up," she said.

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