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State audit finds major fuel racket at NCN

October 8, 2015 | By | Filed Under News 

– One vehicle visited GuyOil station 28 times in July 2014

A state audit on the 2014 financial statements of the National Communications Network (NCN) has confirmed serious breaches of systems.
According to a draft report prepared by the Audit Office of Guyana and sent last month to Chief Executive Officer, Molly Hassan, NCN during the year under review, acquired assets to the value of $88.5M for operational and commercial uses but failed to maintain a Fixed Assets Register.

NCN’s Head, Molly Hassan

NCN’s Head, Molly Hassan

 

The entity, which controls radio and television stations network throughout the country, reportedly spent $15.6M on fuel and lubricants for 17 vehicles last year.


However, there appears be poor record keeping regarding the use of the vehicles as log books for 10 vehicles along with fuel slips for two, were not presented for audit examination.


With several instances where fuel entries were omitted from the log books, auditors found it difficult to monitor the fuel consumption of the vehicles. There appeared also abuse of NCN assets and monies.


Motor vehicle, PKK 3623, was listed as being assigned to the Marketing Manager during the year under review. However, an examination of his contract revealed that he was not entitled to a company vehicle but instead, was paid $52,000 per month as travelling allowance for the year under review.


Yet the vehicle took fuel totaling $274,322 representing fuel consumption that was paid for by NCN. Auditors felt that the Marketing Manager should have paid for the fuel.


Another vehicle, PRR 3501, was being used by a member of the NCN Board of Directors (an Office of the President operative) on occasions in the months of August and October 2014. NCN paid for all charges even though the vehicle was being used for private purposes.


“This would also constitute to a breach of company policy since there was no authorisation for the vehicle in question to be loan to an individual in a private capacity.  This situation might have been condoned on other occasions that were omitted from the log books, since entries were confirmed to be omitted in several other cases.


“At the time of audit (June 2015), this vehicle was verified to be badly damaged and parked in the compound of NCN,” the draft report noted.
There were more on the fuel situation. The quantity of fuel to be uplifted by the drivers from the GUYOIL service station was not recorded on the fuel authorisation slips- instead ‘full up’ or ‘full tank’ were recorded, leaving the opportunity for easy manipulation.


In addition, auditors picked up on six instances where fuel was observed as being purchased in containers without any explanations or entry into the related stores records. It was hard to determine what the fuel was used for.
28 Times


A detailed examination of the fuel consumption for five of the company’s vehicles for a six-month period chosen at random revealed that the amount of $3.6M was expended on fuel charges. It was also noted that two of the five vehicles had recorded high purchases of more than $200,000 in fuel for three separate months in the six-month period being examined.


Further, it was revealed that one of the vehicles being reviewed visited the service station 26 times for the month of June and 28 in the month of July with an average fuel up of over 22 times per month during that six months period.


“As a result, the company is left to bear a very high fuel consumption charge instead of utilising the funds for a more meaningful and beneficial purpose.”


NCN did not present for audit examination a contract or any form of documented agreement that stipulates the terms or agreement that was in place with the Guyana Oil Company.
Further, audit examination was made of the contract for the repair of a vehicle, bearing registration PLL1339 in the sum of $475,000 which includes the amount of $300,000 for replacing of a complete transmission system.
“Enquiries were made as to the whereabouts of this replaced part as it was needed for audit inspection. However, the part was never located and presented for inspection. As a result, it could not be determined whether the missing part was indeed replaced.”


The draft report cited several other instances of what appeared be lapses and abuse.


Bad NCN
NCN has been under scrutiny for a number of years now after it was discovered that the state was paying millions of dollars in subventions, but the entity still continued to rack up losses.


It is owed millions of dollars by advertisers and others.
In 2012, two senior officials, former Production Manager, Martin Goolsarran was suspended with former CEO, Mohamed ‘Fuzzy’ Sattaur, resigning after investigations found system breaches for a local talent show hosted by GT/T and produced by NCN.


Monies for NCN ended up in the bank account of Goolsarran.
A special audit report found severe system flaws and recommended changes.
However, former President Donald Ramotar refused to release the report despite being asked time and time again by the media.


The former opposition, now forming the coalition Government, had accused NCN of being biased and mismanaged. It vowed to make sweeping changes when it came to power.


There were indications that internal efforts were made at NCN to cover up the investigations involving the GT/T talent show.
The new administration has ordered audits of several state entities since taking office in May.

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