Namibia: National Broadcaster commercially insolvent- Auditor General

The troubled Namibian Broadcasting Corporation (NBC) had accumulated losses of N$170,6 million and a showed a deficit of N$38 million for the financial year which ended in March 2008, while penalties for not paying income tax deducted from employees to the Receiver of Revenue run into millions.

 

The NBC faces various court cases and has been sued for altogether N$100,4 million by different people and companies, but has not made any provisions for that sum.

 

“The continued losses and unabated deterioration in liquidity and solvency ratio indicate that the Corporation has a liquidity crisis and is commercially insolvent,” Auditor General Junias Kandjeke said in his latest audit report on the NBC.

 

“I am unable to express an opinion on the financial statements of the NBC,” Kandjeke added, citing a long list of reasons like investments that did not agree with balances held in various Fund accounts at banks.
The report was tabled in Parliament last week.

 

The NBC had a total expenditure of N$145,1 million during the 2007-08 financial year, and received N$62 million as annual subsidy from the Information Ministry for that period. Income gained from licence fees and advertising equalled a third of the total expenditure, namely N$50,6 million.

 

Income received from advertising on the NBC radio services was N$11,4 million, television advertisements came to N$17 million and television licence fees amounted to N$16,4 million. Payments received for transmitter charges and advertising billboards came to N$5,5 million.

 

However, the auditors discovered that insurance premiums for the all-important transmitter stations – assets valued at N$108 million – were not paid by the NBC.

 

Not only that, insurance premiums for “plant and machinery” of the NBC were also not paid. “Hence, they were not covered by insurance”, the Auditor General said. The joint insurance value of these assets was N$206,3 million.
The NBC also does not have a complete register of its assets, including buildings and land countrywide.

 

The NBC has not paid Pay As You Earn (PAYE) contributions deducted from its staff to the Receiver of Revenue since 2005 and owes it a staggering N$102,6 million plus penalties. The penalties for late payment of PAYE tax deducted by the NBC from its employees came to N$69,3 million.

 

The Auditor General however pointed out that this sum for penalties was reduced slightly to N$57 million after some payments were made.
“The NBC is a parastatal and consequently subject to the laws that Government makes. This makes it ethically so much more important that the NBC complies with the law,” Kandjeke emphasised.

 

Companies are by law compelled to pay over VAT and PAYE to the Receiver without delay. The NBC has been repeatedly criticised by the Parliamentary Standing Committee on Public Accounts for having broken the law by not making these payments.

 

The NBC still owed N$11 million for the purchase of foreign television programmes during the 2007-08 financial year.

 

Salaries for the more than 350 employees of the NBC came to N$92,5 million, of which N$79 million was for salaries and wages and N$13,4 million was the employer’s contribution to the staff pension fund. The NBC also paid out N$15,1 million to employees who had more than 90 days’ accumulated leave.
The NBC spent N$1,98 million on travel and N$413 212 on transport, while its “vehicle expense” came to N$1,5 million and N$2 million was spent on leasing vehicles.

 

The corporation’s water and electricity bills amounted to N$9 million, and its telephone and Internet bills to N$6,6 million during the 2007-08 financial year.

 

- March 29, 2010 by Brigitte Weidlich

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Source: www.namibian.com.na/news/full-story/archive/2010/march/article/nbc-commercially-insolvent-kandjeke/ (accessed on 30.03.10)