PAEC told NFM gets $4.8m annual subsidy

THE National Flour Mills (NFM) enjoys a taxpayer subsidy of $400,000 a month – equivalent to $4.8 million per year – company chief financial officer Michael Valentine said on November 6.

He was replying to a question by Mayaro MP Rushton Paray at a sitting of the Public Accounts Enterprises Committee (PAEC) of Parliament at Cabildo Chamber, Port of Spain.

Valentine said the subsidy went towards the running of NFM's plant at Carlsen Field.

Paray then made the point that if NFM was a state entity getting taxpayer funding, it had to follow the state enterprise operating manual, tying into conversations about accountability earlier in the sitting.

Port of Spain South MP Keith Scotland had asked if NFM had carried out its plan to introduce new equipment and procedures, and if so, had these measures led to reduced costs of manufacturing.

Company CEO Ian Mitchell replied yes.

He said NFM's before-tax profits had risen from $9 million in 2022 to $54 million in 2023.

Pressed for details of NFM's after-tax net profit, Mitchell said this had risen from $1.4 million in 2021, $6.9 million in 2022 and $35.5 million in 2023.

Earlier, opposition senator Wade Mark had asked who does the company's internal audit.

NFM corporate secretary Sati Jagmohan said the audit need not necessarily be provided by someone internal to the company, as she explained NFM had contracted an external auditor.

Pressed by Scotland, who cited the importance of an audit committee under the Companies Act, Jagmohan said the auditor reports to the board's audit committee, which in turn reports to the board of directors.

Scotland wondered why the NFM could not employ its own auditor within the company, saying many graduates leave university each year. He asked if the package offered by NFM was not attractive enough, and also suggested the company look regionally or even internationally to employ an auditor.

Director Ross Alexander said the board has discussed this continuously and would prefer an auditor internal to NFM rather than external.

"It is difficult to get," he said. However, saying the NFM was now in a cost-cutting mode, he said, "Presently we are very satisfied with the performance of the people we have hired (as external auditor)."

He said they were "doing an excellent job, at less cost."

Ryan Maharaj, a director in the Ministry of Finance, said the use of external auditors did not breach the provisions of the state enterprise operating manual.

On the fate of the former internal auditor, Alexander said she had resigned for a better job offer. He said two other staff members had been considered but were not promoted into that position.

Mark asked if NFM has a budget allocation for training staff.

Mitchell replied yes, saying this allocation covered sending staff abroad to train in the science of baking and milling, and said NFM also provided corporate training in areas such as interpersonal skills development (provided by the company's human resources department).

Mark asked about NFM allegedly spending $500,000 on training senior managers outside TT at a US-based firm called Inspiration Labs. He said this would use up scarce foreign exchange.

He pressed for details of who has had foreign training.

Mitchell said there is such a company providing services (training) to the NFM and promised to supply the PAEC the details of the costs.

Mark asked how the US firm had been sourced – by competitive tender or sole-select tender – and for how long they had been engaged.

Scotland advised Mitchell to provide the answers in writing.

Scotland asked if the NFM's procurement handbook was being updated in line with recent legislative changes.

Jagmohan said this was now under way and would be completed by month-end.

Scotland asked for it be sent to the PAEC by December 1.