The Parliamentary Committee on Public Accounts has not ruled out the possibility of fraud at the New Era Publication Corporation (NEPC), as it investigates irregularities in the corporation’s 2012/13 annual report.
“The probability of fraud activity could be there. We need to ensure that public resources were properly utilised by the corporation,” said Chairman of the Committee, Mike Kavekotora, yesterday, as he listened to explanations from NEPC Board Chairman, Tarah Shaanika; NEPC Chief Executive Officer (CEO), Dr Audrin Mathe; and NEPCs Chief Financial Officer (CFO), Beatus Amadhila.
However, the NEPC trio said it was difficult to provide answers as the reported irregularities occurred before any of them joined the corporation.
During the interrogation, the Parliamentary Committee requested answers and documentary evidence on differences amounting to N$4.8 million in NEPC’s payroll system compared to the general ledger payroll accounts. In addition, the CFO was asked to account for N$1.5 million for expenditure incurred where supporting documents were not provided for auditing purposes as well as expenses amounting to N$2.4 million with regard to insurance premiums, motor vehicle expenses and rental/leasing agreements. Auditors were also unable to compare Pay As you Earn (PAYE) returns submitted balances to amounts recorded on payroll reports, as these reports were not presented.
“The accounting officer is requested to explain why submission of PAYE returns and payment of PAYE to Inland Revenue for the year under review amounting to N$2 632 882 were not done,” the committee asked the NEPC representatives.
The committee also pointed out that as per tax status report dated February 24, 2014, the total liability due to Inland Revenue by NEPC stood at close to N$25 million, of which about N$9.5 million was due for tax, close to N$10 million was in penalties and N$5.6 million was charged for interest. In defence of the corporation, Shaanika noted that 50 percent of the amount owed to the Receiver of Revenue has already been paid over.
Furthermore, the committee noted the audit of bank transactions revealed that bank reconciliations are not performed nor reviewed. “A difference amounting to N$1 142 176 was noted for (the) Bank Windhoek current account and no bank reconciliation was provided for audit purposes,” read the committee’s questionnaire for NEPC.
Additional questions by the committee included N$2 million for supplier statements as well as supporting documents for property, plant and equipment additions amounting to N$3.3 million.
However, Dr Mathe, told the committee that himself, Shaanika and Amadhila only joined the corporation after the period under review and therefore requested that individual staff involved in decision making before this time be subpoenaed to provide answers.
Mathe said his current team has put measures in place to ensure all irregularities are avoided and that a paper trail exists for each and every transaction.
He added that while NEPC received a yearly subsidy of N$13 million from government, the actual expenses of the corporation added up to about N$87 million.
“We actually generate the bulk of our money ourselves,” said Mathe, adding that if an NEPC turnaround plan is fully implemented then receiving a subsidy from government will soon be something of the past. Part of the turnaround plan includes the establishment of an NEPC printing press to print the corporation’s daily and weekly editions.”
Shaanika also emphasised NEPC exists as a result of an Act of Parliament. He pointed out to the committee that this legislation mandates the corporation to undertake duties that are not always commercially viable. “We are confident that we have made progress (in accounting for the money) and we are sure that New Era is in a much better position now than it was in 2013,” Shaanika concluded.
Commenting on the Parliamentary investigation, New Era’s former Finance Manager and one-time acting CEO, Jeremy Cloete, said he would be available “anytime” to clarify any queries relating to the corporation’s accounts.
“Everything was in order and every cent was accounted for when I was there. I have never received any queries about NEPC’s books,” said Cloete when contacted for comment.
He served as Finance Manager from 2006 to 2013 and he was also the acting CEO for a few months at the beginning of 2012.
Meanwhile, former New Era CEO, Sylvester Black, who served in that position from 2005 until February 2012, declined to comment on grounds that he left the corporation more than five years ago.
“It would not be appropriate for me to comment more than five years after the fact,” explained Black.