Expenses of Building of Coffee Growers Federation in NY Higher Than Income, Resulting in Losses: Colombia’s Comptroller Warns
Expenses of Building of Coffee Growers Federation in NY Higher Than Income, Resulting in Losses: Colombia’s Comptroller Warns
Bogota (Coffee Network)-The Colombia’s comptroller office said the building of the coffee growers federation in New York has been generating losses instead of making profits as its management spent more than what it received, while it rented part of the building to the coffee company Sucafina at a price that did not reflect market prices.
The 97-page document outlines 15 administrative and fiscal faults, resulting in losses as the managers of the building where the NY office of the coffee growers federation spent more money than what it received in rentals resulting in accumulated losses of COP5.168 billion ($1.292 million) in the period 2018 and 2022.
The NY office of the coffee growers federation had total expenses of COP14.253 billion between 2018 and 2022, but its income for the same period was COP9.084 billion, says the comptroller, which is an independent government institution that acts as the highest form of fiscal control in the country.
One of the first faults it that the NY building, where the FNC office operates, was purchased by the national government in 1965 for US$975,000 but using funds of the National Coffee Fund. As a result, the building appears under the name of the government instead of being named under the National coffee growers federation or the National Coffee Fund.
The building, located at the 140E 57th, New York, NY 10022, is today worth $30 million. FNC, which named the building the Colombian Center (CC) rented two full floors to the company Sucafina but instead of increasing the rent throughout the years, the rental of the floors was a bargain to the company, which indirectly was subsidized by the coffee growers federation, says the comptroller
The Comptroller, whose mission is it seek, the proper use of public resources and goods and contributing to the modernization of the State said
Sucafina initially paid the coffee growers federation a quarterly fixed fee of $10,000 applicable for calendar year 2002. But beginning April 2011, the rent was US$7,000 month although Sucafina occupied a fewer space at the building.
The Comptroller says the National Federation of Coffee Growers, as administrator of the National Coffee fund, allowed a third party to economically exploit the apartments, corresponding to the property owned by the FoNC, without the owner (FoNC) from obtaining economic benefit, as stated.
Sucafina paid $ USD 316,057 between 2018 and August 2021, and the money never entered the accounts of the FoNC as owner of the property as the money was paid to third party Colombian Center.
“This circumstance was generated by the non-observance of the guidelines established both in the administration contract and the foundations of coffee parafiscality, by the National Federation of Coffee Growers. The above evidence uneconomic fiscal management, which resulted in a loss of public resources in the amount.25, corresponding to the amounts paid by SUCAFINA to CCF,” says the Comptroller.
Another argument for this building to generate the strange losses is that “the amount of occupancy contributions (rents) has been maintained for years without increasing, which is not compatible with the value of the expenses associated with the operation of the building. building, since these increase every year, for example, due to inflation. This is the factor that contributes the most to the budget deficit,” states the Comptroller's audit report.
They add that there is uncertainty regarding the concepts that are included in the notion “administration” of the property and warn that practically the National Coffee Fund has been “subsidizing with parafiscal resources the occupants of the property, whose occupation fees are paid by them (rents), they do not compensate for the maintenance costs of the building.” That is to say that despite being leased, they are going to lose.
The audit indicates that “the National Federation of Coffee Growers, as administrator of the National Coffee Fund, did not determine and control all of the income, costs and expenses required by the operation of the property.”
Sources familiar with the situation has told Coffee Network that the former manager of FNC in NY, Juan Esteban Orduz, spent huge amounts of money under his management. Coffee Network asked the comptroller is Orduz is being investigated as well. The Comptroller did not respond queries by the time of writing the story.
The new general manager of the coffee growers federation has promised to put for sale the FNC buildings of NY and Tokio to use those funds in small coffee growers in Colombia.
By Diana Delgado
