– audit report

THE Guyana National Newspapers Limited (GNNL) was poorly managed under the watch of the People’s Progressive Party/Civic (PPP/C) Government with over $88.9M owed by its 10 top customers.This is according to Parmesar – the accounting firm which conducted a special audit and review of the company’s operations for the period November 1, 2011 to May 31, 2015.
In a report submitted to the Finance Ministry, Parmesar contended that GNNL’s Board of Directors did not execute its duties with due diligence, skill, care and prudence.
The accounting firm explained that in an organisation, the Board of Directors is responsible for good governance, particularly in the area of finance. However, in the case of GNNL, the board’s failure to act in keeping with best practices resulted in the company being exposed to financial loss, reputational risk and supervisory sanctions.
In making its case, the firm alluded to the fact that 2013 was the last year a statutory audit of the company’s financial statements was completed. “There was poor oversight for receivables. The receivables balance as at May 31, 2015 was $102.4M. There is no Internal Audit Department,” Parmesar pointed out.
Prior to the installation of the current Board of Directors, GNNL was chaired by Marcia Nadir-Sharma with Jason Abdulla, Vidyawattie Loonauth, Jawahar Persaud, Hydar Ally, Tota Mangar and Kwame McCoy listed as directors.
However, from 2011 to March, 2014, the Board was chaired by Keith Burrowes with Kwame McCoy, Tota Mangar, David DeGroot, Hydar Ally, Pat Dyal and Colin Alfred listed as directors.
Due to the deficiencies that existed in the previous boards, the accounting firm advised that the board should comprise persons with the relevant skills and experience for the good governance of the organisation. “The Board of Directors should comprise, among others the following persons, communication and media specialists, marketing personnel, lawyer and accountant.”
Additionally, the auditor said there was not enough evidence to confirm that significant efforts were made to collect the outstanding debts. At the end of May 31, 2015, the Government Information Agency (GINA), the National Communications Network (NCN), Video Mega, Police Consumers Co-op, Kirk Wynter, Kings Advertising, Reamos, Guyenterprise Advertising Agency Limited and Colin Edghill had owed GNNL a collective sum of $88.9M.
“The $74M owed by the Government Information Agency represents advertisements printed in the newspaper for several government agencies,” the accounting firm explained.
Due to the situation that prevailed at the time of the audit, GNNL is being advised to establish a debt-collection committee with the primary function to collect all outstanding debts within six months.
In addition, there is a call for the company to establish a definitive credit policy which should be documented and approved by the board. The need for all statutory audits to be completed in the specified timeframe was also underscored by the auditor. “An Internal Audit Department should be implemented and managed by a Chartered Accountant,” the accounting firm further advised.

(Svetlana Marshall)

Table showing an analysis of the top 10 balances outstanding as of May 31, 2015