AUDIT OF MARSHALL ISLANDS COPRA PROCESSOR SHOWS LARGE NET LOSS

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MAJURO, Marshall Islands (October 12, 2001 – Marshall Islands Journal)--Tobolar Copra Processing Authority received subsidies amounting to $3,175,964 from the RMI government from 1999 through February of this year, according to the RMI Auditor General’s report to the Nitijela.

The audit shows that Tobolar’s net loss rose dramatically in 2000 compared to 1999. In 1999, the company’s net loss was just $19,347. But last year, it lost $863,191 as a result of a nearly doubling of the cost of copra products manufactured and sold.

While sales remained almost identical both years ($1,274,303 in 1999 and $1,252,551 in 2000), the costs of copra manufacturing shot up from $1,564,753 in 1999 to $2,666,804 last year as a result of more ships bringing copra. Tobolar’s administrative expenses actually declined by almost $20,000 to 168,951.

The audit also reported several findings, including:

· As of September 30, 2000, Tobolar had certain accounts receivable that have been outstanding for more than three years, including one from a Tobolar director totaling $6,890. It urged Tobolar to follow up with the Attorney General’s office on unpaid accounts that were forwarded for collection services. Tobolar management replied that it agreed with the recommendation and will again refer it to the AG’s office.

· A 1992 law created a new Tobolar Copra Processing Authority that was to assume all assets, equipment, rights and obligations from the copra processing plant, but this had not taken place. The audit urged that steps be taken to comply with the requirements of the law, noting that this violation had been pointed out in audits since 1994. Tobolar said it agreed and "will again refer this to the Office of the Attorney General."

· Tobolar owed the Ministry of Finance $22,582 in income tax withholdings from employee wages as of for the period of May 20, 1999 through September 30, 2000. The audit urged Tobolar to comply with RMI tax laws. Tobolar management replied that as RMI "was unable to fund all of the regulated price in fiscal year 2000, it was agreed that payments for income tax withholdings would be made only as and when funds allowed."

· Tobolar was months late in paying Social Security payments during 2000. "While every attempt has been made to pay contributions on time, cash flow restrictions from inadequate funding by Repar of the regulated price has delayed payments," Tobolar management said. "Payment of contributions now takes priority over all other payments and are made by the due date."

The Marshall Islands Journal, Box 14, Majuro, Marshall Islands 96960 E-mail: journal@ntamar.com  Subscriptions (weekly): 1 year US $87.00; international $213.00 (air mail).

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