Lahja Nashuuta
The Berseba Village Council has been operating without a strategic plan or annual operational plan since 2018.
This has left its financial and operational management at serious risk, according to a report by the Office of the Auditor-General.
Auditors revealed that the council does not have a documented plan to guide its operations, and performance agreements for executives and staff were neither implemented nor enforced.
“The Village Council did not have a documented strategic plan or annual operational plan in place for the periods under review; and performance agreements for executives and staff were not implemented or enforced,” the report reads. In a formal letter to chief executive officer Ivan Vries, Auditor-General Junias Kandjeke highlighted the council’s lack of a Performance Management System (PMS) and asked for explanations on alternative measures, if any, to monitor operations and achieve strategic goals. “The absence of these key management tools limits the council’s ability to set measurable objectives, track progress, and hold staff accountable for results,” Kandjeke wrote.
Without a strategic plan, Kandjeke warned, “there is no way to demonstrate results, value, or performance in the institution.” He warned that this could lead to funds being spent on projects that do not align with council objectives, unnecessary expenditure on ineffective activities, undetected fraud, and payments for services that never happened.
The audit also uncovered significant discrepancies in the council’s financial statements. Depreciation expenses were reported at N$1 381 759, while the asset register showed N$815 311.60, resulting in a difference of N$566 445.40. The report noted that such inconsistencies pose a “risk of material misstatement in the financial statements,” potentially distorting both the council’s statement of financial position and its surplus or deficit. Kandjeke asked Vries to clarify these differences.
Concerns were also raised over the disposal of two council vehicles, including a Toyota Corolla (Reg. No. N3819 K) with a nil book value. The audit found no evidence of the sale or that proceeds were deposited in the council’s bank accounts.
Citing IPSAS 17.83, the Auditor-General stated: “The gain or losses arising from de-recognition of an item of PPE shall be included in the surplus or deficit when the item is derecognized,” and requested proof of the sale.
The findings highlight governance, financial accountability, and strategic oversight challenges, underscoring urgent areas needing correction to safeguard public resources and ensure proper service delivery.
Audit reports for the 2018/2019, 2019/2020, and 2020/2021 financial years show ongoing weaknesses in controls, incomplete records, and non-compliance with statutory requirements. Supporting documents for many transactions were missing or incomplete, and revenue and expenditure were often not recorded promptly, creating discrepancies in financial statements. Bank reconciliations were irregular, increasing the risk of undetected errors or misappropriation of funds.
The audit observed that the council has seven bank accounts, only four of which are operational. However, documentation on the authorization to open these accounts and the signatories could not be provided. Payments were sometimes made without proper invoices or authorization, and some expenditures were classified as irregular or unauthorized.
The report notes: “Weak internal controls over revenue collection, combined with poor segregation of duties, further increased the risk of fraud. Financial statements were not always submitted on time, and some procurement activities did not comply with legal requirements, leaving the council exposed to penalties.”
For instance, a payment of N$3 448.00 from Standard Bank Account 040982815 was made to a supplier during the year under review. However, auditors reported the supporting submission from the user department, approved by the CEO, was not provided or attached to the payment voucher, making the legitimacy of the expenditure unverifiable.
The village council was given until 22 August to respond to the Auditor-General’s inquiries. Efforts to reach Vries for comment were unsuccessful.