15 March 2019

Namibia: Nepc Explains Adverse Audit Opinion

Windhoek — The adverse audit opinion that the Auditor General gave New Era Publication Corporation (NEPC) in the audit report for the year ended 31 March 2017 came about as a result of a wrongly-captured balance on a loan account and a mixup in a Receiver of Revenue statement.

Further contributing to this, explained the Corporation's Chief Financial Officer Beatus Amadhila, was a difference in the company's asset register and its general ledger, which resulted in misrepresentation of the financials.

The latest Auditor General's report into the Corporation gives an adverse opinion, which Amadhila said was unflattering and is working towards solving in order to attain a clean audit opinion. The Auditor-General's report was tabled by the Deputy Minister of Finance Natangwe Ithete in the National Assembly this week.

NEPC, a non-commercial entity, remains in a situation that threatens its ability to meet its long-tern financial obligations - attributed mainly to historical debts owed to the Receiver of Revenue.

Amadhila said between 2011 and 2013, NEPC made losses but recorded surpluses in 2014 and 2015 respectively. However, in 2016 a deficit of N$32.6 million was recorded. This, explained Amadhila, was due to an escalation in operational expenses such as printing costs of N$18.1million, penalties worth N$14.7 million from the Receiver of Revenue and a capital expense of N$5 million.

"The accumulated deficit is therefore attributed to the above recorded losses and mostly to 2016, which was a defining year in terms of updating the company books to correctly reflect the debts owed to the Receiver of Revenue - a practice that was not adhered to previously," said Amadhila, who joined NEPC in early 2016.

According to Amadhila during the 2017 financial year, it was further picked up that the Corporation had not been correctly adjusting its debtor's book, which necessitated the company to make a provision of doubtful debts resulting in a bad debts expense of N$10.2 million an expense that contributed immensely to the loss of N$13.1million in 2017.

"This was necessary to ensure conformity to best practice in treatment of debtors book which were long overdue but not collected," explained the CFO.

"The said events contributed immensely to the accumulated losses, in addition to reduction in advert and circulation revenue, which declined by N$5.8 million in 2017 compared to 2016."

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