Kidney Foundation clarifies board payments

The National Kidney Foundation (N.K.F.) has defended the payment of directors' fees to ex-government officials who sit on its board, saying that it has a warrant exempting it from the prohibition.  

Controller and Chief Auditor, Fuimaono Camillo Afel, highlighted the issue of paying fees and allowances to former government officials who sit on their board in the Audit Report for the 2015-2016 Financial Year. 

The Audit Report stated the payments were not in compliance with Cabinet Directive (11)38 that prohibits remuneration of former civil servants. 

But in response to the Auditor's report, the N.K.F. management explained that the directors’ fees were paid under their warrant of appointment, which was still valid as it was cleared by the Attorney General’s Office

The N.K.F. General Manager Mulipola Lose Hazelman told the Samoa Observer that the former government officials were working for State-owned enterprises. 

“At the time, the government employees working under the Public Service Commissioner and the said [Cabinet Directive] only referenced public servants; however following that year (2015) the Ministry of Finance, amended the regulations and now all Government employees, including [State Owned Enterprises] are not allowed to receive any allowance as Board Directors.

“We consulted with the Attorney General’s office at the time over this matter,” explained Mulipola.

The organisation also undertook to address an issue raised about its vehicle fleet being under-insured. 

According to the N.K.F. annual report for Financial Year 2015 the total director fees paid out in that financial year was $47,244.

The full audit for the year ending 30 June 2015 is printed below. 

National Kidney Foundation of Samoa for the year ended 30 June 2015

1. Payroll deductions include employees’ loan repayments to the National Provident Fund for short term loans and loans on entitlements which is a non-compliance with labour and employment legislation. This issue was raised in the previous year audit. 

NKF is seeking the approval of the Ministry of Commerce, Industry and Labour to allow other deductions consented to by employees to be made.

2. Some employees had no contracts in their personal files. This issue was raised in the previous year audit. 

NKF said that the recent amendment to the National Kidney Foundation of Samoa Act stipulates the creation of a General Manager giving him the power to enter into a contract as well contracts with staff. 

NKF is expected to action this by December 2015 when they will have a new Board of Directors.

3. The total written down value of vehicles as at 30 June 2015 was $55,977. However, the sum insured for these vehicles was $135,027. NKF will try and negotiate this with insurance providers. 

However, NKF replied that it is secure in the protection of its assets, and third party liability in the event of a loss/damage as the sum insured was greater than the net book value of motor vehicles.

4. Fixed assets were not insured except for motor vehicles. 

NKF will seek quotes from insurance companies by December 2015.

5. NKF was still paying directors' fees and allowance to government ex-officials in their Board of Directors which is non-compliance with Cabinet Directive FK(11)38. 

NKF responded that these directors’ fees were paid under their warrant of appointment which was still valid as cleared by the Attorney General’s Office.

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