NFMU collected $66M but kept it out of its accounting system

May 26, 2016 News

Forensic auditors are concerned about the weak systems of control that exist at the National Frequency

NFMU Head,
Valmiki Singh

Management Unit (NFMU). In its report, the forensic auditing team of Ram and McRae, Chartered Accountants, noted that the invoicing system at NFMU was poor.

In this regard, the auditors said that the receivables ledger for the NFMU as at May, 2015 showed a total of 264 credit balances with a value of $66.5M. This, they said, reflects invoices that were never created, or were omitted from the accounting system even though the monies were received.
These include payments from Pritipaul Singh Investment, E- Networks Inc., Noble House Seafood, I-Radio Inc., Wireless Connections Inc., and WRHM Inc.
The auditors said that the excuse by the NFMU management was that these represent prepayments. They noted however that even such an explanation amounts to a violation of the NFMU’s Standard Operating Procedures (SOP) of the Accounts Department which require that users be billed six weeks before the anniversary date.
Moreover, even if they were prepayments, the auditors said that the accounting treatment and the explanation by the NFMU demonstrate a fundamental misunderstanding of accounting for prepayments.
The auditors recommended that the requirement of the relevant SOP be complied with and that invoices be dispatched in compliance therewith.