Jun 07, 2016 News
Forensic auditors remain puzzled that the National Communications Network (NCN) paid over $6M to a foreign company for broadcasting equipment since 2011 and is yet to receive it.
What is even more mind-boggling is the fact that NCN never pressed the company for the items it paid for. And to top it off, the company called Euro Broadcast Corp. folded in 2013 and never returned the money to the state owned company.
The forensic auditors from Parmesar Chartered Accountants made this clear in a special investigation which was conducted into NCN.
In a detailed report, the auditors said that the acquisition of broadcasting equipment was approved as part of NCN’s 2011 capital budget. This then saw the company receiving approval in March 2011, from the National Procurement and Tender Administration Board for NCN to send requests for quotations to four suppliers for the equipment.
Following the request for quotations, only one was received in May 2011 from Euro Broadcasting Corporation to a value of US$71,780. It was noted that NCN has purchased equipment previously from Euro Broadcasting Corporation as they are the distributors for broadcasting equipment for the Caribbean and Latin America.
On July 2, 2011, the National Procurement and Tender Administration Board awarded a contract to the entity to supply broadcasting equipment for US$33,530.
It was noted that on August 26, 2011 Demerara Bank Limited transferred the sum of US$33,530 to Euro Broadcasting Corporation on instruction from NCN. The forensic auditors said that while the amount of US$33,530 was remitted in August 2011, no contract or any other documents were available to confirm the terms and conditions of the supply of the broadcasting equipment.
The auditors were able to locate an unsigned performance invoice dated January 12, 2011 which was seen from the Euro Broadcasting Corporation. The invoice indicated that delivery of goods would be within four weeks but NCN is yet to receive it.
The auditors also noted that there is no evidence that any action was taken to follow up on the delivery of the broadcasting equipment after the amount was remitted on 26 August 2011.
Surprisingly, the auditors found that in May, 2012, Euro Broadcasting Corporation informed NCN via email that the company has terminated business.
The forensic auditors also found out that Euro Broadcasting Corporation filed its Annual Report for 2011 and 2012 with the Florida Department of State Division of Corporations in September 2013. And in that very month, the Euro Broadcasting Corporation filed its notice of Dissolution.
The forensic auditors were able to locate a memo which was filed by Sabana Singh, NCN’s Finance Manager who had informed the former Chief Executive Officer (Ag) Michael Gordon of the outstanding delivery of the broadcasting equipment. She also sought his advice on how to deal with the matter. Sattaur was also told of the matter but no directive was provided at the time.
The forensic auditors were also particularly concerned that this matter was not picked up by external auditors or addressed by the Internal Audit Department. This matter was only brought to the Board of Directors attention in 2013 when management sought approval to write off the US$33,530 as bad debts.
Based on the evidence gathered, the auditors concluded that NCN did not adhere to its Tender and Procurement Procedures, as there is no evidence that the NCN Tender Board Committee nor the Evaluation Committee were functioning relative to the purchase of the broadcasting equipment.
“It is our understanding that NCN has in its possession a transmitter which was a loan from Euro Broadcasting Corporation. This is the only asset at NCN’s disposal to recover any value from Euro Broadcasting Corporation. The value of this transmitter has to be determined to ascertain the net loss to NCN,” the auditors expressed.
They added, “There was no requirement for the provision of a security for this contract. There is no documentary evidence that NCN contacted the supplier at any time between August 2011 and September 2013.”
The auditors recommended that the Board of Directors should consider disciplinary actions against the officers who failed to carry out NCN’s procurement procedures. They said that the Board of Directors should ensure that the Tender Board Committee and Evaluation Committee are functioning and their work should be evidenced by appropriate minutes.
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