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PIHO Financial Situation Improving

The financial director of the Petroleum Industry Health Organization (PIHO) has said the financial situation of the organization has been improving.
"There were many challenges with regard to liquidity and healthcare costs in the current [calendar] year, but PIHO's financial situation is improving," Ahmad Madanipour said.
Citing foregoing challenges, he said: "Unfortunately in the current [calendar] year, the liquidity situation was not proper in most companies affiliated with Ministry of Petroleum and therefore they faced numerous problems in paying health premiums to PIHO. That affected PIHO's financial situation and therefore it did not have an acceptable financial situation."
He said that the inappropriate financial situation resulted in the accumulation of debts and increased PIHO commitments to healthcare and pharmaceutical centers with which it had contracts. 
"However, despite all aforesaid problems, persistent and relentless follow-up was made and the bulk of debts were collected in the final months of the year," he said.
Madanipour said some outstanding debts which pertained to 2016 were settled and PIHO's debt burden was relieved.
"We hope that these debts would be cut to below 40% up to yearend," he added.
Madanipour said: "The extension of PIHO-run areas and the growing number of employees made liquidity problems more visible."
"Providing costs particularly for staff has been a major cause of concern for this Directorate and we have done our utmost to not face any problem in this regard and satisfy the staff to be able to provide services more tranquilly. Positive steps have been taken in recent years in the financial sector. Some of them were centralized payment, petroleum cards and other allowances whose payment were delayed in the past years, leading to discontent among employees," he said. "Despite liquidity problems in the past three years we sought to make salary payments on time," he added. 
Madanipour referred to problems with accounts and the financial situation of PIHO, saying: "In PIHO offices there were accumulated big losses due to six years of loss production up to March 2013. Therefore, PIHO was subject to Article 141 of Trade Law and was close to bankruptcy. As a result, the General Assembly had to vote for dissolution or recapitalization, but it did not make any decision on this issue and PIHO was forced to settle the issue by itself."
"We carried out surveys to precisely identify all incomes particularly in forgotten sectors like the per capita allowance for boys aged above 22 (who had not been identified after 2012) and also revenues acquired from bought-out companies," he said, adding that the Company's situation changed to reach profitability and as accumulated losses fell PIHO was taken off Article 141 agenda. Fortunately, this profitability continued in the following years."
Madanipour referred to reports from Auditing Organization about the financial accounts of PIHO in recent years and the ramifications of reports, saying: "The conditional clauses incorporated into these reports were basic and important. Since these reports serve as basis for reference by other organizations like Tax Affairs Organization and State Audit Court in their annual audits, challenges were double."
"By taking necessary arrangements and under the aegis of interaction and close cooperation with audits and making the required changes and reforms and complying with legal obligations and regulations and offering necessary transparency in offices, such clauses have been on the decline," he added.
Madanipour said the audit report for 2016 was basic and lacked any basic clause. This trend has been now under way, he said, "and we hope for more improvement in this regard."
He went on to highlight the problems for PIHO created by the Tax Affairs Organization by referring to audit reports.
He said: "In 2012 and 2013, Tax Affairs Organization, citing audit reports and legal inspector, rejected financial accounts and levied taxes despite loss production over the two years. Without calculating fines on default payment, IRR 1,650 billion was imposed on PIHO. Thanks to follow-up by the Directorate of Finance, this big challenge was overcome in the following years and a much smaller debt as well as outstanding debts were agreed upon and settled."
Madanipour said that taxes levied for 2014 and 2015 had been agreed upon by the Department of Finance at minimum level. 
"Although settlement of these sums required major liquidity, the closure of dossiers and payment of all taxes is a breakthrough for PIHO," he added. 
Madanipour said that the aforesaid problems had gripped most companies affiliated with the Ministry of Petroleum.
"Outstanding debts and taxes have snowballed into a big challenge for some oil companies, most of which are subject to Article 141 of Trade Law. Without the help of mother and upstream companies they could never overcome these challenges. PIHO has overcome such challenges without being assisted by upstream companies. In addition to acquiring effective and helpful experience, PIHO has been ahead of other companies in many sectors and it has sought to remove these challenges," said Madanipour.
He also referred to training courses held to upgrade the level of knowledge of financial staff in different areas and further coordination within the organization. 
"Certain courses on the subject of money laundering, stakeholder obligations, tax regulations, inventory of commodities and warehousing have been held in order to increase the level of knowledge of colleagues, provide more transparency and fully respect laws and regulations," he said.
Madanipour highlighted the significance of implementing budgeting and tax laws, saying Article 169 (bis) of Direct Tax Law applied to financial system and all obligations of the Ministry of Economy and Finance have been respected.
As far as money laundering and related obligations are concerned, financial software has been designed and documents of costs are issued in compliance with these obligations, he said, adding that one the most perfect software belonged to PIHO.
"The foregoing points have been incorporated into software without any loophole and in full compliance with law. There would be no clause on this issue in the auditing report for 2017," said Madanipour.
He said the PIHO Directorate of Health was determined to upgrade interior control systems and offer more transparency on accounts in addition to institutionalizing correct identification of costs and incomes by using cost price system and launching and upgrading industrial auditing units in PIHO-run areas.
"We will try our best to make it happen in coming years and be able to calculate the net price of healthcare services precisely and by applying methods of industrial accounting system," said Madanipour.
Noting that PIHO is among few profit-making companies affiliated with the Ministry of Petroleum, he gave a positive assessment of PIHO and its financial situation.
"We have favorable financial conditions; however, due to debts towards some centers and contractors we have still to make efforts to collect our remaining debts in order to facilitate compliance with our financial obligations," said Madanipour.
He heaped praise on financial affairs staff and said success achieved throughout the past years were owning to efforts undertaken by all staff in the Directorate of Health, expressing hope for persistent success.
 
Jul 3, 2018 17:47
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