Auditor general (AG) Junias Kandjeke has given the Helao Nafidi town council an adverse audit opinion for its failure to fully account for public resources entrusted to it.
Put simply, an adverse audit opinion states that the financial statements do not present fairly the financial position, results of operations, or cash flows of the entity in conformity with generally-accepted accounting principles.
Chiefly, supporting documents or schedules for the changes in accounting policies, errors and corrections amounting to N$17 million were not provided for audit purposes.
“Reconciliation of the capital development fund based on the management report amounting to N$21 million does not agree to the financial statements' balance amounting to N$28.69 million, resulting in a difference of N$7.7 million,” Kandjeke found.
The details are captured in the local authority’s 2019/2020 AG’s report which was tabled in the National Assembly last week.
“The financial statements do not present fairly, in all material respects, the financial position of the town council of Helao Nafidi as at 30 June 2020,” Kandjeke stated.
The top public auditor continues poking holes in Helao Nafidi’s accounting processes.
“Capitalised assets recorded on the capital development fund amounting to N$12.95 million does not agree to financial statements' balance amounting to N$13.8 million, resulting in a difference of N$830 002. The capitalised assets were erroneously recorded under capital reserve fund. Government grant received amounted to N$20.2 million, Road Fund Administration grant amounted to N$2.6 million and sales of erven income amounted to N$1.87 million were recorded under capital reserve fund instead of income line items,” Kandjeke said.
What is more, the town council did not disclose its open land in the fixed asset register.
In addition, the value added tax reconciliation performed based on the returns submitted, payments made and receipts amounting to N$1.6 million differs from the financial statements' balance amounting to N$346 484, resulting in a difference of N$1.3 million.
“Included in the debtors age analysis is an amount of N$1.4 million for the suspense account balance which is made up of direct deposits, which was not cleared from the previous years,” it was further found.