NPL stayed bloated after meals slashed
Auditor General Pamela Monroe Ellis has raised questions about a decision by the Ministry of Education, Youth and Information to slash subvention in half to Nutrition Products Limited (NPL) and divert funds to schools while retaining the entire staff of the public body.
In conducting the performance audit of the public body, the auditor general sought to determine whether NPL was managing its resources to provide meals to schools in keeping with its mandate.
Senior technocrats from the ministry told auditors from the Auditor General’s Department that based on consultation with school representatives, they received complaints regarding the quality of NPL’s products.
Further, an assessment showed that most schools served by NPL have canteens. On this basis, the ministry reduced NPL’s subvention, lessened the schools under NPL’s programme, and, instead, increased the number of students and cooks in schools, which fall under the cooked-lunch programme. This resulted in increased funding to schools.
In September 2018, the ministry instructed NPL to reduce the number of schools served to 69, from 548, and the number of students on the feeding list to 3,810 from 77,076.
However, after slashing NPL’s subvention in half and diverting the funds to the schools, the ministry retained the staff cohort of NPL.
Monroe Ellis reported that despite the assertion made by the ministry for diverting funds to schools, it increased NPL’s subvention in 2019-20 to $1 billion, from $626 million in 2018-19, and $760 million in 2017- 18, although the number of students being fed fell to its lowest, 18,732.
In providing the rationale for reducing NPL’s subvention, the Ministry of Education indicated that “there were widespread complaints regarding the products that were being distributed to schools by the NPL”.
However, the auditor general said she saw no evidence that the ministry met with NPL with the aim of assessing the complaints received from the schools and assessing NPL’s performance.
“We expected that the ministry, in receiving the complaints, would have reviewed the performance and management structure of NPL to determine whether the management cohort had the requisite skill set and experience to achieve the objectives of NPL,” the report said.
The auditor general also said that NPL did not provide evidence that it assessed the cost effectiveness of closing its St Mary and Westmoreland plants with a view to determining whether there would be any cost savings on the overall operation of NPL.
However, with the reduced output for 2018-19 and 2019-20, the auditor general said that NPL’s overall production cost per unit increased to $43 in 2018-19, and $111 in 2019-20, relative to an average $19 per unit between 2015-16 and 2017-18.
Further, the auditor general noted that the reduction in NPL’s administrative costs was not commensurate with the reduction in production quantities. Administrative costs reduced by an average of 14 per cent when compared to the production units, which were reduced by 84 per cent.
Monroe Ellis also revealed that NPL reported zero production output in the 2018-19 school year at its Westmoreland plant, which has 33 production workers on staff who were not gainfully employed but were paid $19.6 million between April 2018 to March 2019.
The auditor general described as ineffective the board and Ministry of Education’s oversight of the NPL.
• $5.5 billion in subvention, 2015-16 to 2020-21.
• Production reduced to 4.9 million units in 2019-20 from 43 million units in 2015-16.
• Students fed reduced to 18,732 in 2019-20 from 156,291 in 2015-16.
• Production cost per unit increased to $111 in 2019-20 from $18 in 2015-16.