Auditor general gives NBC adverse audit opinion

FOR the last nine years, auditor general (AG) Junias Kandjeke has given state-broadcaster, the Namibia Broadcasting Corporation (NBC), adverse audit opinions for failing to present him with a fair reflection of the entity’s financial position.

“In fact, NBC has been receiving adverse audit opinions since 2011,” Benitha Nakaambo, the senior public relations officer at the AG’s office confirmed.

An adverse opinion is a professional opinion indicating that a company’s financial statements are misrepresented, misstated and do not accurately reflect its financial performance and health.

In his recent report – the 2017/18 financial year- which was submitted to the National Assembly for scrutiny on Tuesday by the finance minister, Calle Schlettwein, Kandjeke once again gave NBC an adverse audit opinion.

He premised his opinion on 18 key findings classified as “recurring”.

Chiefly, the corporation has “no assets supporting liability for post-retirement medical aid benefit fund amounting to N$348 174 000”.

This means NBC has no finances reserved for its employees’ post-retirement medical aid benefit for the period under review.

Kandjeke also found that depreciation charged on buildings was overstated by N$5,2 million, while its revaluation surplus was overstated by N$6,2 million.

The auditors also found that the corporation hired an unqualified valuer to re-evaluate its land, buildings and investment properties during the period in question.

The value of land owned by NBC was overstated by N$5,7 million.

Moreover, NBC included a property worth N$10,3 million, which is not registered in its name, while a lack of individual creditors reconciliations was also detected.

Meantime, the auditors established that there are inadequate controls over the completeness of transmitter rental income and TV licence revenue.

Adverse opinions are detrimental to companies because they imply wrongdoing or unreliable accounting practices, according to basic accounting principles, the report stated.

“As at 31 March 2018, the corporation had net current liabilities of N$236 666 302. Should the corporation be unable to receive adequate funding from the government, the corporation may have insufficient cash to fulfil obligations to various creditors. This may impede the continuation of the broadcasting corporation, which is the corporation’s main business,” Kandjeke warned.

However, Kandjeke is of the opinion that NBC could generate sufficient funds to cover most of its operational expenditure.

Kandjeke also expects the government to be financially supportive of the corporation in continuing its mandate, as the national broadcaster.

Kandjeke’s latest opinion left Schlettwein disturbed. “NBC’s financial position is unpleasant,” Schlettwein said in the National Assembly on Tuesday. – Nampa