SWAKOPMUND – Auditor-General Junias Kandjeke has issued an adverse audit opinion on the municipality of Swakopmund for the financial year ending 30 June 2023.

According to Kandjeke, the report contains several irregularities and weaknesses in financial reporting. An adverse audit opinion means the financial statements contain significant misstatements or omissions and do not accurately reflect the institution’s financial position.

“The significance of the matters identified during the audit means the financial statements cannot be relied on to give a true picture of the municipality’s financial affairs,” Kandjeke noted in his report.

Among the issues highlighted were the absence of an acceptable accounting framework, failure to align statements with recognised standards, and undisclosed accounting policies, all of which created confusion and a lack of transparency. The audit also revealed that notes to the financial statements were not included in the original submission and were only provided after auditors requested for them.

Kandjeke highlighted a difference of N$6.9 million in the municipality’s VAT receivables, while the fixed asset register was incomplete, lacking acquisition dates and depreciation details. “Without proper records, we cannot verify the accuracy and valuation of the municipality’s property, plant and equipment,” he said.

Other concerns raised included the omission of the value of open land from the financial statements, failure to make provision for the rehabilitation of dump sites, and errors in the preparation of the cash flow statement. The municipality also failed to compile a statement of changes in equity.

The audit also flagged a N$1.3 million difference in surcharges received from ErongoRED, failure to properly account for a severance provision of N$21.8 million, and the non-disclosure of short-term investments worth N$111.9 million as cash equivalents. 

In addition, Kandjeke questioned a N$135.5 million investment in ErongoRED that was not supported by a share certificate.

He has urged the municipality to take urgent steps to correct its financial practices. “Management should ensure all provisions, reconciliations and disclosures are properly made in line with international public sector accounting standards,” he recommended.

The auditor-general also noted the late submission of VAT returns to the Namibia Revenue Agency as well as the late submission of financial statements to his office, which he said was in contravention of the Local Authorities Act. 

“Such delays not only attract penalties but also tarnish the reputation of the municipality,” Kandjeke warned. -edeklerk@nepc.com.na