PPP/C, APNU/AFC owe NCN $M for elections ads

The forensic audited conducted on the State-run National Communications Network (NCN) has revealed that the company failed to bill two major political parties – the People’s Progressive Party/Civic (PPP/C) and the A Partnership for National Unity/Alliance For Change (APNU/AFC) for over million in political advertisements aired during the 2011 and 2015 General Elections campaigns.
According to the audit report published by the Ministry of Finance on Friday, the parties owe NCN a total of ,978,450.
“Based on our review of the system, it was identified that several advertisements were not invoiced to the People’s Progressive Party/Civic (PPP/C) and one for A Partnership for National Unity (APNU)/Alliance for Change (AFC),” the auditor stated.
It was outlined that in 2011, PPP/C was not invoiced for ,204,750 and APNU for ,500 in advertisements aired by the State-run company. NCN
The summary of PPP/C, the then government, free ads includes: $4,704,000 for 100.1 Radio Roraima Fresh FM; $5,667,500 for 98.1 Hot FM; 3,878,250 for Channel 11 and $3,955,000 for the Voice of Guyana 102.5.
Also included in the PPP/C’s debt is $12,988,500, which was recorded as Public Service Announcements (PSA). The auditor pointed out that NCN could not have presented a documented policy on PSAs, but was noted that political advertisements are not approved as PSAs.
Meanwhile as it relates to 2015, PPP/C and APNU/AFC were not invoiced for advertisements aired by NCN to the tune of $3,708,200 and $20,000, respectively.
In relation to the PPP/C free ads during the 2015 Elections Campaign, $39,200 was for 100.1 Radio Roraima Fresh FM; $1,453,750 for 98.1 Hot FM; $492,000 for Channel 11 and $1,723,250 for Voice of Guyana 102.5.
The auditors also founded that another $3 million was never invoiced for free services provided to Eddies Bobcat Excavator and Construction Services, a business owned by the company’s Finance Manager’s husband.
“It was identified that advertisements totalling $3,083,396 were not invoiced to Eddies Bobcat Excavator and Construction Services, instead those advertisements were recorded as PSAs. Advertisements were aired during the period 9 September 2011 to 31 May 2012,” the auditor highlighted, while noting that actions should be taken to recover the money owed.
Against this backdrop, the auditor recommended that “Systems should be implemented to ensure that all advertisements aired by NCN are invoiced to customers.”
The report further outlined that advertisements are recorded on a Daily Broadcast Log Sheet for each radio station and television station by the Marketing Department and the log sheet is submitted on a daily basis to the Productions Department for airing on the relevant station. The broadcast logs are signed off by the technicians on duty as evidence of advertisements being aired.
It was observed that the broadcast sheets are summarised on a monthly basis for billing to the customer by the Marketing Department and then passed on to the Finance Department, however, there is no evidence that the summary prepared is being approved by any senior personnel or cross checked by the Accounts Department for accuracy and completeness.
Furthermore, the auditors highlighted that an effective credit control system in place should ensure that orders are accepted from customers who are able to pay within a time period which is acceptable to the company. Once a sale has been made it is the duty of credit control to monitor the accounts to ensure that payment is commenced within the normal credit period and that any accounts which are not settled promptly are investigated and appropriate action taken.
Credit sales to customers should be approved by authorised personnel of the company based on approved credit established.
Moreover, the auditors revealed that NCN have large receivable balances outstanding for the following years: $244,994,451 for December 31, 2011; $278,401,380 for December 31, 2012; $234,413,585 for December 31, 2013; $219,911,646 for December 31, 2014, and $230,015,361 for May 31, 2015.
It was pointed out that in a few instances NCN incurred legal fees to recover debts through the Courts. In two instances – Hits & Jams Entertainment for $7,913,193 and Kashif & Shangai for $2,046,703 – the court ruled in favour of NCN. However, the Board of Directors at a meeting held on 10 March, 2015 decided not to enforce the judgment thus failing to recover the debt.
“For the two matters involving Hits & Jams Entertainment and Kashif & Shangai, the NCN incurred legal fees in excess of $1,200,000. There is not adequate evidence to confirm that significant efforts were made to collect the debts outstanding,” the auditor opined.
Moreover, the forensic audit report outlines the company’s top 20 balances outstanding.
These are: $17,525,326 from Impressions; $11,795,765 from the Ministry of Health; $9,523,248 from PPP/C; $7,913,193 from Hits & Jams Entertainment; $6,344,300 from the Media Centre (PPP/C); $5,259,864 from Beepats Company; $3,378,579 from Brutal Tracks Recording; $2,713,342 from Merundoi Inc; $2,220,123 from Ministry of Tourism, Industry & Commerce; $2,117,555 from Guyana Water Inc.; $2,046,703 from Kashif & Shangai; $1,745,412 from Wireless Connection; $1,650,222 from Caribbean Fire Fest Production, and $1,330,984 from Ministry of Health – Chronic Diseases.
In addition, the Company wrote off bad debts to the tune of $8,610,794 in 2013, which was approved by the Board of Directors. Among the write offs are: $5,246,936 from Astroarts; $486,190 from the Georgetown Reading & Research Centre; $2,497,281 from Wireless Connections, and $380,387 from Creative Advertising.
These bad debts were deemed uncollectable as per section 6 of the Limitation Act, Chapter 7:02, laws of Guyana.