Following a forensic audit conducted at the National Frequency Management Unit (NFMU), it was recommended that a series of revamp measures be undertaken to enhance the functioning of the Unit.
Among the recommendations put forward by independent auditing firm, Ram and McRae Consulting, were revamping of the organisational structure, enhance the technical capabilities, ensure that current organisational objectives are met and prepare for the passage and operationalising of the Telecommunications Act.
The report, which was released on Friday by the Finance Ministry, said in addition to appointing a Board of Directors, the NFMU needs to establish a proper reporting line with the subject Minister; that is, Prime Minister Moses Nagamootoo.
“It is therefore recommended that pending the passing of the Telecommunications Act, the Prime Minister and the appointed Board should establish clear lines of authority, communications and reporting with and within the Unit,” the auditor stated.
On the issue of the Telecommunications Act, Ram and McRae urged that the Unit prepare for the passage and operationalising of the new legislation since when enacted, the NFMU will be absorbed in the new Agency and subject to that authority.
This will require new regulations and orders to ensure that the functions are performed and to maximise revenue collection, the report stated. In addition, it outlined that as the telecoms sector is on the verge of being liberalised and modernised, next generation mobile networks will need more spectrum, which would result in increased revenue. On this note, the Unit is advised to reduce and regularise the number of unlicensed spectrum users.
This now brings the issue of outstanding debts and debt management. Ram and McRae said during the review, it was revealed that a number of issues were unearthed primarily in the areas of managing revenue and receivables, and illegally meeting expenditures of other agencies and projects.
The accounting department should implement standard procedures for the invoicing of users and the following up and collection of receivables. These procedures should include the specific timeframes for letters, telephone calls and suspension of licences for hard-core defaulters.
Furthermore, it was observed that the Standard Operating Procedure (SOP) of the NFMU’s Accounts Department saw invoices being prepared a minimum of six weeks prior to the anniversary data. However, a number of licences were not invoiced in accordance with the SOPs. Also, with regard to payment tracking, the SOPs highlights that accounting staff should execute phone calls to the licensee two weeks before the anniversary date, on the anniversary date and two week after the anniversary date to ensure payments are received but these responsibilities were not properly conducted, the auditors posited.
According to the accounting firm, in the case of a corporation sole, which the NFMU falls under, responsibility for ensuring the existence and operation of an adequate system of controls rests with the Managing Director. This represents a significant weakness on the management and oversight of the NFMU since it can facilitate the overriding of controls by the Managing Director.
Moreover, Ram and McRae went on to talk about the “close connection” between the NFMU, which is charged with the responsibility for allocating frequencies, and the Guyana Broadcasting Authority (GBA), the agency responsible for issuing radio, television and cable licences.
The report went on to detail that during the years 2012 to 2015, the NFMU met payments on behalf of the GNBA amounting to $28,877,267. These payments included directors fees, employees salaries, and fees for the GNBA’s Monitoring Committee and other operating expenses. In December 2014, the GNBA reimbursed the NFMU for the entire sum advanced as such no further action was required.
However, Ram and McRae outlined that while the head of the NFMU is a member of the GBA, given the corporate sole status of the NFMU the GBA has no formal role in that body. “Ram & McRae also strongly disagrees with the current status as a Corporation Sole,” the auditor remarked.
Additionally, the auditing firm recommended that the NFMU establish relationships with institutions or authorities outside of Guyana in the area of radio frequency spectrum management and develop technical standards and engineering support facilities necessary or appropriate in relation to the functions.
“Implementation of the recommendations contained in this report should enhance the functioning of the Unit,” the firm stated.
Moses Nagamootoo
