Dear Pa,
I have attached excerpt from the special audit report that touched on the D17m land purchase by Mambury Njie at the time he was the Managing Director of GNPC. Details of the auditor’s findings is on page 354 of the report . i have attached excerpt for you. This expose the kind of finance minister we have. The land was over-valued and the Anderson is a friend of his.
Thanks for the great job.
Governance of substantial purchases
8.37 Our review of the 2018 Board minutes indicated that the GNPC Board expressed concerns over the transparency of large transactions conducted by management. The minutes detail their specific concerns in relation to a land deal entered into by GNPC management.
8.38 GNPC Senior Management informed us that all the land for its existing stations has been gifted by the Government of The Gambia. However, in our review of the March 2018 Board minutes, we noted that GNPC had begun the process of purchasing a piece of land in Banjul in order to construct a new station as part of their land banking initiative. This is an initiative to purchase strategic land for future GNPC petrol stations and GNPC has a committee of Managers who advise on various aspects of property deals.
8.39 The price discussed was GMD 17m (USD 354k), with the board minutes indicating GNPC had already paid 50% of this price. The vendors of the land per the sales agreement are Wilfred I.N Anderson and Mathias George. They are described as the beneficial owners of the property which forms part of the estate of the deceased Mr. Wilfred Manly-Rollings. Per the minutes, one of the Board members set forth their opinion that “…the price in question was exorbitant for the property in question.”
8.40 The minutes note that no prior approval was sought from the National Environment Agency (“NEA”) to construct a service station, and no feasibility study was conducted. The minutes also note that a financial and business model was not performed or evaluated prior to the investment. The minutes indicate that the land was purchased while the current Minister of Finance, Mr. Mambury Njie, was the Managing Director of GNPC.
8.41 The minutes indicate that the Board wished to be guided on the procurement limit of the Board and Management so that a threshold could be established which would require involvement of the Board in certain operational activities. Per the Board minutes we reviewed, we note this issue was not fully resolved.
8.42 Per the minutes Mr. Njie defended not having involved the board earlier by stating that based on his experience (as the former Managing Director) at SSHFC “…operational matters are handled by the Management and they later present their findings to the Board”.
8.43 In our subsequent meeting with Mr. Njie, he explained the strategic importance of that particular site to central Banjul sales and highlighted the need to move quickly and without Board approval. He noted this was because GNPC had lost several previous strategically advantageous sites, and that he wanted to maintain commercial confidentiality around the purchase.
8.44 In our meeting Mr. Njie further noted that a valuation was done before the first payment was
made in December 2017. He indicated the valuation figure was GMD 19m (USD 396k). We attempted to independently verify the amount with the valuation company, Sphinx Associates Gambia Co. Ltd. The company informed us a valuation had been performed on the property, however they would only disclose this information to a third party, upon receipt of permission from their client. They clarified that their client was not GNPC.
8.45 A copy of the valuation report was instead provided to us by MoFEA. The report confirmed the total value of the land and buildings to be GMD 19.27m, with the land constituting GMD 16.57m of that total.
8.46 We identified a potential purchase of land for a second Banjul station in the 2017
Management Accounts. GNPC Finance team indicated that the remaining portion of the sale price discussed in the minutes had been paid.
8.47 We note that independent valuation advice and scrutiny of large transactions, such as land deals, is a key control in managing corruption risk. Independent scrutiny and segregation of duties are also important controls that help to mitigate transactions which may be disadvantageous or harmful to the business.
Recommendations and current efforts
8.48 We recommend that GNPC engages a third party to perform a full verification and valuation
of their existing asset base. This will allow the entity to construct a complete and verifiable Fixed Asset Register, which can be used as a reliable driver of the figures in the GL. We note that GNPC has recognized the need to perform this third party Fixed Asset verification. The GNPC Finance team noted that the Terms of Reference to perform the exercise are currently being drafted. We recommend GNPC proceeds swiftly with this initiative to aid in the rebuilding of the GNPC Balance Sheet.
8.49 We recommend GNPC implements the ‘Four Eyes Principle’ (i.e., two independent performing a review) and restricts permissions around any potential entries to the GL accounts for Fixed Assets. This will aid in reducing discrepancies between the GL and a verifiable Fixed Asset Register.
8.50 We recommend that a full asset verification exercise is undertaken at least annually by GNPC to aid in identifying assets requiring impairment or write-off.
8.51 We recommend enforcing that all land purchases are accompanied by an independent valuation from a third-party. Moreover, purchases above a certain threshold must be approved by the Board prior to any funds being pledged.
