company, they had not been profitable in the immediate past and the company had not managed to fully recover from the Government the costs of servicing the universal service obligations. 

## 3.0 Management Letter 

The following were some of the matters raised by the auditors and the management responses thereto: 

## 3.1 Agency Agreements - Terms and Conditions 

The auditors noted that the company had not been complying with the agency agreement terms and conditions with respect to Botswana Savings Bank contract which stipulates that the amount collected on behalf of BSB should be remitted to BSB within 10 days of claims and receipts, failure of which a penalty of 10% per annum would be charged. As a result of non- compliance the company was charged P574 520 as penalties for late payment. The penalties for the year under review had not been quantified and included in the financial statements. 

In response management stated that they continued to monitor and ensure compliance to the agreement. They further stated that it had taken a long time to agree on proposed revised agency rates as the current ones were un-economic. 

## 3.2 EMS Government Mail 

The auditors noted that there were no schedules or information maintained for the amounts due from various Government Ministries for EMS Government mail. The amounts were mixed in one account which made it difficult for the auditors to trace what was owed by individual departments. 

In response management noted the auditors finding and indicated that they would detail all outstanding invoices by organization by July 2018, pursue recovery from owing departments or through Ministry of Transport and Communications between August and December 2018 and lastly make a request for write-offs of any unrecoverable amounts by January 2018. 

## 3.3 Accounting for Donated Stamps for the Philatelic Museum 

The auditors observed that the company had not, in prior years, included in the company’s books of accounts the donations of 

