KUALA LUMPUR (Oct 10): Government auditors have flagged a material uncertainty on the ability of five subsidiaries of Pertubuhan Berita Nasional Malaysia (Bernama) to continue as a going concern, which resulted in the national news agency itself getting its second consecutive qualified opinion from the auditors on its financial statements for the year ended Dec 31, 2021 (FY2021).
According to the Auditor General’s Report on Federal Government Agencies' Financial Statements 2021 released on Tuesday (Oct 10), the units flagged were Bernama Bhd, Trips 4u Travel & Tours Sdn Bhd, Digital Media Broadcasting Services Sdn Bhd, Bernama News Channel Sdn Bhd and Uxera Sdn Bhd (formerly Bernama System & Solutions Advisor Sdn Bhd).
“The auditors who audited the financial statements of Bernama’s direct and indirect subsidiaries have issued an auditor’s report with an opinion of material uncertainty of going concern,” the report read.
Uxera, which is involved in IT and broadcast system solutions, made a loss of RM3.37 million in FY2021, with current liabilities also exceeding current assets.
“The four [other] subsidiaries have shown a financial position of net liability for four consecutive years from 2017 to 2021. This shows material uncertainty that raises significant doubts about the companies’ ability as a going concern,” the AG said.
The report added that Bernama has not performed any impairment assessment on its investments on its units for FY2021, despite having adopted the Malaysian Public Sector Accounting Standards (MPSAS) back in 2020, which requires an entity to test for impairments annually.
The report also said the national news agency's expenses for FY2021 was overstated, as it certified the payment of RM72.71 million for salary, wages and employee benefits for FY2020 that included the expenses of indirect subsidiaries’ staff costs — namely RM11.64 million from Bernama News Channels, and RM3.61 million from Digital Media Broadcasting Services.
“Subsidiary companies are separate legal entities from Bernama, therefore, the payment of salaries, wages and employee benefits should be recorded in the respective company’s financial statements.
“This has caused Bernama’s expenses to be overstated and its current year’s surplus to be understated by a total of RM15.25 million,” it added.
In addition to Bernama, the AG has expressed its qualified opinion on the financial statements of 18 federal government agencies for FY2021, up from 17 the previous year.
Aside from Bernama, others with qualified opinions are the Kuala Lumpur City Council (DBKL) and the Malacca Port Authority, among others.
According to the report, the AG audited the financial statements of 141 federal government agencies and gave unmodified opinions to 123 of them that indicated the auditor's conclusion that the reports were presented fairly, of whom 21 also had an emphasis of matter (EOM). An EOM simply highlights a situation/part disclosed in the financial statements that is fundamental to understanding of the statements.
Four other statements are still undergoing audit, the report said.
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