The country’s Land Acquisition and Development Fund is in deep disarray both financially and materially.
Transactions were reclassified without disclosure, and comparative figures between the budget and actual amounts were not properly recorded.
Additionally, critical value assessments were not issued in 2025, auditor general Junias Kandjeke has flagged.
He highlighted key shortcomings in the Land Acquisition and Development Fund’s audit report for the year ended 31 March 2025.
He said one of the biggest mishaps is the financial statements of last year, which show that the 2024 comparative figures for expenditure had been materially reclassified between categories without disclosure.
An example, Kandjeke pointed out, is the farm-related expenses category, which was eliminated with its entire amount of N$4.9 million and was reclassified as security services with N$3.7 million and the travelling, sitting allowance and accommodation expenses category with N$1.2 million without any disclosure.
Similarly, office expenses decreased by N$2.4 million with corresponding increases in other categories.
These adjustments differ from the audited 2024 financial statements and were not explained in the notes the Fund submitted.
He cautioned that, as per accounting standards, when the presentation or classification of items in the financial statements is amended, comparative amounts shall be reclassified unless the reclassification is impracticable.
“When comparative amounts are reclassified, an entity shall disclose the nature of the reclassification, the amount of each item or class of items that is reclassified and the reason for the reclassification. In my opinion, the financial statements do not present fairly, in all material respects, the financial position of the Fund as of 31 March 2025.
“The financial statements do not also present fairly the Fund’s cash flow for the year ended in accordance with International Public Sector Accounting Standards (IPSAS),” said Kandjeke, who gave the Fund an adverse audit opinion.
An adverse audit opinion states that the financial statements do not fairly present the financial position, results of operations or cash flows of the entity in conformity with generally accepted accounting principles.
Mismatch
The auditor also noted that the Fund did not present a comparison of budget and actual amounts as required, and value assessments were also not issued during the year under review, particularly the land valuation assessment and taxation regulations.
The Fund recognised land tax income of N$24.4 million using the cash-basis accounting method instead of the accrual basis, which has caused the land tax income to be significantly misstated.
By applying the cash-basis method, the Fund only records land tax income received within the financial year rather than income payable through tax assessments.
It was also flagged that trade receivables were overstated by N$11 million.
The balance relates to land tax payments made by farm owners to the Namibia Revenue Agency (NamRA), which have not yet been transferred to the Fund’s bank account.
The Fund recorded this as receivables. However, it does not meet the definition of a financial asset under accepted auditing protocols, because the Fund does not control the inflow of economic benefits from NamRA.
“An entity shall present a comparison of the budget amounts for which it is held publicly accountable and actual amounts, either as a separate additional financial statement or as additional budget columns in the financial statements.
“The comparison of budget and actual amount shall be represented separately for each level of legislative oversight, including the original and final budget amounts, the actual amounts on a comparable basis and, by way of note disclosure, an explanation of material differences between the budget for which the entity is held publicly accountable and actual amounts,” said the auditor.
Kandjeke advised that, as stipulated in the Government Notice No. 120 of 2007 under Land Valuation and Taxation Regulations and in the Land Reform Act, land tax is due and payable as required in the relevant notice of assessment served on the owner concerned.
The amount of such tax is calculated in accordance with the formula set out in the Act.
“It must be paid by every owner of agricultural land for the benefit of the Fund, in respect of each financial year, a land tax based on the land value of that land as shown on the main or interim valuation roll and calculated at such rate or progressive rate as may be determined by a notice under section 76 of the Act,” the country’s top chief auditor said.