Namcor pays for costly accounting ‘advice’

THE National Petroleum Corporation of Namibia is paying an external accountant N$25 200 per meeting for advising the head of the board’s audit committee, who is not well-versed in accounting.

Former energy minister Obeth Kandjoze appointed a new board comprising Patrick Kauta, Barbara Omoregie, Anna Libana, Lorentha Harases and Roger Swart in October 2016 to lead the national oil company.

It turns out none of the people on the board has an accounting background. Harases was, however, going to be guided by an external consultant, who would advise or as some source put it, sharpen her accounting skills on Namcor matters.

The consultant, Ally Angula, advises Harases, who is the investment manager at the Social Security Commission, on Namcor’s audit systems.

Angula served on the Namcor board before as a vice chairperson, which Harases said was an advantage because Angula “possesses institutional knowledge of the business”.

The board decided to seek the services of Angula in October 2016, and appointed her in May 2017 for two years.

Angula referred all questions to Namcor.

Namcor managing director Immanuel Mulunga in turn referred queries regarding the consulting job to Harases.

Harases told this month that Namcor is paying Angula N$25 200 per meeting for two meetings every year since they recruited her in 2016.

She said Angula’s appointment as a consultant was mainly because the company had no chief financial officer, and because there was no chartered accountant on the board.

“Angula was considered because she has a high degree of expertise in audit, risk and compliance,” Harases stated.

The committee meets four times a year.

Although the agreement is for Angula to assist with only two of the four meetings, the committee chair said that other meetings may arise, and that new payment arrangements would have to be made.

A source within the state-owned entity said the appointment of a consultant to advise the committee and its chairperson is an “unnecessary cost that resulted from the board not having an accountant in the first place”.

The source, who did not want to be named, said a chartered accountant should ideally head any audit committee.

The source added that the skills of a chartered accountant are even more vital for Namcor because of the nature of its business, which involves making critical financial decisions.

“The chartered accountant would then head the committee, as the name of the committee speaks for itself,” the source said.

Despite being a financial fundi, Nedbank Namibia recently sued Angula for defaulting on over N$1,2 million she owed the bank. According to court documents, Angula allegedly defaulted in instalments for an original loan of about N$5 million.

Public enterprises minister Leon Jooste said his ministry does not appoint boards, but makes proposals to the line ministers on the appointment of board members.

His proposal to former mines minister Kandjoze for a chartered accountant to be appointed on the Namcor board was rejected, he stressed.

“The composition of a board of directors is critical, and failure to appoint according to the requirements of an entity may result in additional costs which could have been avoided,” Jooste told yesterday.

Because of the absence of a chartered accountant on the board and subsequently not having the skills on the committee makes it “appropriate to appoint a consultant to advise the audit and risk committee,” the minister continued.

“We are about to conduct board evaluations, and will make appropriate recommendations to ministries to fill skills gaps where they exist,” Jooste said.

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