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Jul 01, 2018 News
They said, too, that NCN’s liabilities exceed its assets by $107,844,249.
At this rate, the auditors said, “Neither management nor I can guarantee the company’s ability to continue as a going concern.”
A going concern Find entity’s liabilities exceed assets by $107.8M
The financial records of the National Communications Network (NCN) are not up-to-date. This was revealed in the state entity’s Annual Report for 2016.
According to Chartered Accountants, Nizam Ali and Company, they were unable to determine the ownership of, existence and valuation of noncurrent assets stated at $1,893,221,569. Noncurrent assets are long-term assets that a company expects to hold over one fiscal year that cannot readily be converted to cash within a year.
This can be in the form of investments made in another company, large equipment or intellectual property.
In addition, the auditors were unable to make an assessment of title deeds for property worth $487,354,883. This was due to the fact that the necessary documents were not available for the audit. The Chartered Accountants also reported that NCN failed to properly maintain a fixed asset register which is a basic underlying assumption in accounting. The assumption is that a company or other entity will be able to continue operating for a period of time that is sufficient to carry out its obligations, objectives, and so on.
FORENSIC AUDIT REPORT
When the Granger-led Administration initiated a forensic audit into NCN back in 2015, the aforementioned findings were made along with many others.
The report notes for example, that since 2015, NCN did not maintain a fixed asset register. Auditors said that the company attempted to outsource the management of the fixed asset register, however this exercise proved futile. It was advised by company officials that due to the volume of work in the Accounts Department, it is unable to undertake the management of the fixed asset register.
The report of the forensic auditors also made a number of recommendations for NCN to get its act together. These include having systems implemented to ensure that all statutory audits are completed on a timely basis; carrying out a complete verification of all non-current assets which should form the basis for the preparation of an up to date fixed asset register; establishing a definitive credit policy which should be documented and approved by the Board of Directors; and establishing a debt collection committee with specific responsibility to collect all outstanding debts within six months.
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