Meat Board Counts Pennies

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By Staff Reporter Windhoek The Meat Board of Nami-bia is in a serious financial crisis. Consequently, it plans to introduce remedial action to cut costs and increase revenue generation. The anticipated measures would have far reaching consequences for its customers as well as beneficial projects that the Meat Board has been funding. Indications are that the finances of the Meat Board have been sliding down over the years owing to poor management and lack of controls. One of the examples given by sources is that of a consultant who is based in South Africa and only submits invoices for payment without having a system in place that checks on the validity of such claims, actual hours worked and the corresponding work done. It is also believed that the Meat Board had an open ended policy in the past where officials on trips abroad to countries like Australia, Ireland and Germany would not get hotel specifications for their accommodation. Such officials would receive 230 Euros per day excluding accommodation fees. This translated into N$1 700 per day. It is understood that the institution now has resorted to using local rates for trips outside Namibia. This again has left some employees in a fix as they have to foot parts of their bills from their own pockets. To try and salvage the finances of the institution, the board is set to meet later this week to consider the various options that are open to it. Measures likely to be considered include an increase in general levy which is the primary source of income for the Meat Board. It is estimated that the Meat Board would need N$15 432 114 for its expenditures for 2006/7 whereas income from levy stands at N$7 368 600. This represents a shortfall of N$ 8 063 514 from break-even point. Statistics indicate that the Meat Board is dependent on levy on 330 000 cattle, 1 400 000 small stock and 30 000 pigs at N$12, N$2.40, and N$1.62 respectively. The easiest route to take to achieve break-even point is to increase the levy by 110 percent. Indications are also that the Meat Board would introduce something called “classification levy” in the place of current “classification fees”. Revenue from classification fees apparently contributes approximately 20 percent of the cost incurred by the Meat Board to provide classification services. According to information in our possession, classification could either be in the form of full cost recovery of expenses incurred per abattoir or a subsidised classification levy whereby an abattoir would be required to contribute a certain percentage of the classification cost. The current classification fee is N$3.20 and N$0.60 per head for cattle and small stock respectively. This means that should the board opt to introduce the anticipated levy, the charges would become N$15 for cattle and N$2.50 for small stock. According to our information, the total classification of personnel cost to the company is N$4 254 913. The Meat Board’s calculation is that should this be financed through a special levy, it would reduce cost on personnel financed from the general fund by 41 percent. The Meat Board argues that the advantage of a separate classification levy as opposed to the increase of the general levy is that the classification levy would be borne by those who make use of the service. The institution is also toying with the idea of introducing what it calls “fan meat levy”. It says since the introduction of the national traceability system, it was financed from stabilisation funds. The introduction of a special levy for the traceability system will generate an income of N$1.5 million, according to figures provided by the Meat Board. The company also wants to start soliciting funds from donor agencies for projects. The Meat Board is also considering slapping an administration charge of 10 percent on all projects including registration of Stocks Brands. To cut costs, the Meat Board is looking at down-sizing and restructuring. Out of expenses on the general funds which stands at N$15 432 114, personnel costs alone consume N$10 024 804 or 65 percent of all expenses. The institution says it is therefore inevitable that the board considers trimming the workforce. This would be done by introducing voluntary retrenchment or targeting a certain age group for early retirement, as well as cutting down the size of the management cadre. Other cost-cutting measures include suspension of funding for some projects and contribution to certain funds, minimising board activities such as meetings and international visits. The man who reportedly drew up the blueprint for the financial turn around strategy, Sam Mbuti, the finance and administration manager refused to shed light on the issue and denied that he was in the know of the document. Another official Van Zyl, the classification manager referred this newspaper to Paul Strydom, the General Manager of the Meat Board. So did Sikunawa Negumbo, the marketing manager who said there was a directive from Strydom’s office that all media queries be referred to his office. Strydom however failed to return calls from us.