Leaked NCN report says…Difficult to verify how much money was being made

Aug 15, 2012 News

–    ads aired, clients not billed

A damning report into fraud allegations at the state-owned National Communications Network (NCN) has unearthed shocking details of how poorly kept records made it difficult for auditors to verify how much money was actually being made.
Not only were the Production and Technical Log Book, which records production activities, not up-to-date, but details were limited as to the actual work that NCN was doing for GT&T’s Jingle and Song Competition. The report did not make it clear if the scarcity of details was deliberate.

Resigned: Former CEO, Mohamed ‘Fuzzy’ Sattaur

This is significant as NCN only a few months ago claimed in Parliament that it collected over $500M in revenues in 2011.
The report was ordered by NCN’s Board of Directors following allegations of financial irregularities at that entity which controls the country’s only radio stations. NCN also controls a network of television stations.
“Further, there is no evidence that the Production and Technical Log Book is being reviewed by the Production Manager. Also, there is no evidence that the Production and Technical Log Book is reviewed to ensure that all production services are invoiced to the relevant customers.”
Another record, the Staff Log, which controls the movements of reporters and cameramen, was also not in order and did not detail work done for the competition.
The revelations about financial impropriety at NCN have rocked the country since hitting the media in June.
Following the investigations, the Board of Directors had suspended Programme Manager Martin Goolsarran for eight weeks. His boss, Chief Executive Officer Mohamed Sattaur, has since resigned.
Government had declined to release the report on the findings of the investigations which was done by accountant, Harry Parmessar. But it was leaked to a Parliamentarian, and Alliance For Change Leader, Khemraj Ramjattan, over the weekend called for criminal charges to be laid against both Sattaur and Goolsarran. Ramjattan also called for a full-blown probe into the operations of NCN and for the report to be handed over to the police.
The investigations revealed that no verification was done on another critical record, the Broadcast Log, to ensure “all billable broadcasts are being invoiced to the customer. This could result in loss of revenue to the NCN.”
This suggested that ads were being aired, but clients were not being billed.
The investigation was sparked by allegations that monies paid by GT&T to NCN for taping, airing and producing the hugely popular Jingle and Song Competition, were improperly handled by NCN.

Suspended: Martin Goolsarran

This newspaper understands that, contrary to previous reports, it was Yog Mahadeo, CEO of GT&T, who drew the attention of the authorities to the issue at NCN. While there has been an independent audit at GT&T, that company’s findings had no bearing to that of NCN. This newspaper also understands that Mahadeo had recommended that the audits of both companies ensure 100% compliance with controls. He had insisted, however, that the GT&T internal matters were not related to the NCN audit.
GT&T had its own conflict of interest issue for which four persons were terminated. Yog Mahadeo had subsequently tendered his resignation after learning of the misdemeanours under his watch, but was not involved in the conflicts and breaches.
He remains with the company until the end of September 2012.
It will be recalled that NCN was hired by GT&T to tape, produce and air the competition.
NCN’s Sattaur and Goolsarran later claimed that because of the general elections, it had to sub-contract work to Hits and Jams, a local entertainment entity involved in that kind of work. NCN would have earned $3,620,000 while Hits and Jams earned $3,930,000.
But the auditor questioned whether NCN was really limited in staffing and equipment as its records reflected over 51 cameras and “no indication of staff limitation.”
Goolsarran later stated in a response to Prem Misir, Chairman of the NCN Board of Directors, that while there may be 51 cameras in the records, “most are old, not working, or were sent for repairs. In addition, some have been distributed to out of town locations in Berbice and Linden.”
He said that there were 10 cameras at the Head Office at NCN being used for news, general programming and in the studios.
The report has also highlighted attempts made in June by Goolsarran and Sattaur to pressure staffers at NCN to illegally backdate invoices.
The leaked report, while not making it clear, suggested that the attempts were made even while the investigations were ongoing or about to start, in June.
Opposition parties in Parliament have blocked millions of dollars in subsidies to NCN and a sister agency, the Government Information Agency (GINA), calling for reforms and claiming the two were heavily biased in favour of government.
The investigations had found that Goolsarran was paid more than $3M in cheques from GT&T which he deposited to his personal bank account.
The report found that NCN did not prepare a written contract with Hits and Jams and that it was all an oral arrangement.
The report made it clear that both the CEO and Goolsarran failed to carry out their duties diligently and professionally.
“They have knowingly breached the company’s internal control procedures. Their actions in dealing with the GT&T Jingle and Song Competition clearly demonstrated conflict of interest.”
The report also recommended that the Board of Directors should take necessary actions, including legal ones, to recover loss of revenue for all amounts paid to any individual.