Auditor general Junias Kandjeke expressed dismay at 26 local authorities and 10 regional councils who are in breach of the law by not submitting up-to-date financial statements.
Some of the institutions have several years of reports outstanding but have blamed Covid-19 and a change in the reporting system.
The special report of the AG on the non-submission of financial statements by some local authorities, regional councils, statutory bodies and funds, up to the financial year ended 30 June 2020, was submitted to parliament last week.
The 26 local authorities listed in the report with outstanding financial statements are Rehoboth with four, Rundu (three) Eenhana, Katima Mulilo, Opuwo and Lüderitz with two each.
Oshakati, Ruacana, Usakos, Helao Nafidi, Khorixas, Oniipa and Omuthiya town councils each have one outstanding report for the 2019/20 financial year.
The Okahandja and Grootfontein municipalities are also accused of not complying with the stipulation Act 23 of 1992 by not submitting up to date financial statements.
Berseba, Bukalo, Gibeon, Gochas, Kalkrand, Maltahöhe, Otjinene, Stampriet, Tses and Witvlei village councils are also on the list of culprits.
According to Kandjeke, the non-submission of financial statements hampers the execution of his mandate and causes unnecessary delays and that is why he expressed it to the National Assembly.
“A significant improvement has been noted since the previous report, but local authorities still do not comply with stipulations by not submitting up-to-date financial statements,” he pointed out.
Adding to the list are the Erongo Regional Council with an outstanding of 2019/20 financial statement. Kavango East has 2018/19, 2019/20, Kavango West Regional Council has four outstanding statements dating back to 2016/17 to 2019-20. Khomas has 2019/20 outstanding. Kunene Regional Council has 2019/20 while Ohangwena, Oshikoto and Zambezi have also not submitted the latest financial statements.
Omaheke and Otjozondjupa regional councils have 2018/19 to 2019/20 reports outstanding according to the report.
Kandjeke said another concern is the increase in the number of requests to the AG in terms of their respective acts for an extension to submit financial statements.
However, the chief regional officer (CRO) of the Khomas region Clement Mafwila denied the council has an outstanding statement, saying that there was a delay caused by the Covid-19 pandemic as well as the transition of standards put up by the government.
“We have submitted our statement but of course we had to request for the extension of the submission as we were delayed by the migrating of information from the regional council general accepted accounting (GAMAP) to the international public sector accounting standard (IPSAS). When we finished with the process, it was that time of the lockdown where people were working from home. We did submit but not on time,” he explained.
Kavango West CRO Erwin Katewa confirmed that council didn’t submit the financial statements for the periods indicated due to the various operational challenges such as the establishment of the new region which was not accompanied by the necessary financial resource to recruit all relevant key operational positions in both finance and administration positions.
“Council has been operating below capacity in terms of its staff establishment ever since. In addition, communication network infrastructure also contributed to the delay as our server was only installed towards the end of 2019. Other operations of migrating from manual to computerised integrated financial management system took time due to a shortage of staff members to capture data for all the outstanding financial periods,” he explained.
Katewa further explained that both the administration and the finance divisions have now been capacitated with the necessary human resources.
“The delay was, therefore, caused by external factors beyond our control. Lastly, we are confident to inform you that by the end of October, all outstanding financial reports will be ready for submission,” he added.
Oshakati Town Council spokesperson Katarina Kamari also denied the allegation by the AG, saying his office granted an extension, which the council has honoured.
“In our letter to the auditor general’s office, Oshakati Town Council requested an extension for the submission of our financial statements for the financial year 2019/2020. The office of the auditor general granted us a submission date of 30 October 2020, which the council has honoured,” she said.
“As we speak, the auditor general’s office have appointed an independent auditing firm by the name Vital Assurance Registered Accountants and Auditors, who are currently busy with the council’s audit from the 20th to 24th September 2021.”
Helao Nafidi mayor Darius Shaalukeni confirmed that the council did not submit their statement as there was a minor problem caused by the change from the GAMAP reporting system to the IPSAS system.
“Those systems were just changed without training, but we are nearly done with rectifying the statements of 2019/20 and 2020/21 and we will submit them soonest,” he said.
Another issue Kandjeke outlined was local authorities relying on consultants to draw up their financial statements due to lack of capacity.
“The office of the auditor general obtained treasury approval to exempt all local authorities from paying audit fees for five years starting April 2014, on condition that local authorities utilise the savings towards capacity building with so that they are able to draw up their financial statements by March 2019. It is an ongoing concern of which none or little progress was made during the past financial years,” he said.
The AG recommended the urban and rural development ministry to develop a training programme for staff at local authorities in the drafting of financial statements.
Several calls were made to the chief regional officers and town councils mentioned above to obtain comments but the attempts proved futile.