WINDHOEK – Although treasury approval was obtained to utilise some expected savings on the defrayal of expenditure through virements during the 2018 financial year, the Ministry of Defence still exceeded four of its subdivisions’ budgets with an amount of N$88.9 million.
This information is contained in the ministry’s annual report for 2018 as audited by Auditor-General Junias Kandjeke.
The report was compiled in terms of Section 27 (6) of the State Finance Act, 1991.
The cited four subdivisions which were exceeded include three operational units and one development unit which is unauthorised in terms of Section 6 (iii) of the State Finance Act of 1991.
Kandjeke said despite the matters being reported during previous audits, there seemed to be no improvements in internal controls, thus the audit would once again highlight control weaknesses.
He observed that unauthorised expenditure has been recurring in the defence ministry for three consecutive years. These are in 2014/15 when eight subdivisions exceeded budget with an amount of N$43.96 million, 2015/16 when four subdivisions exceeded with an amount of N$76.52 million and 2016/17 when 20 subdivisions exceeded by N$371.22 million.
During the 2016/17 financial year, the total vote was exceeded with an amount of N$185.24 million.
Kandjeke recommended that the accounting officer put measures in place to avoid overspending and ensure that planned activities are implemented within the approved budget.
In his response on the draft report, the accounting officer indicated that the ministry agrees with the findings but that they had informed the Ministry of Finance on various occasions of the difference between a funds distribution certificate and general ledger, but no action was taken.
The audit also states that all expenditure on services of the state shall be defrayed from the state account.
However, the audit found that the ministry made payments amounting to N$7 829.53 out of the State Revenue Fund from the ministerial fines’ revenue head without treasury approval.
A similar payment was also found during the audit of the 2016/17 financial year.
Kandjeke recommended that the accounting officer explain why the ministry has made repayments from the State Revenue Fund.
Additionally, it is recommended that the accounting officer complies with the State Finance Act, 1991. Section 17 stipulates that (a), “no expenditure shall be incurred as a charge to State Revenue Fund (b) no payment shall be made as a charge to the State Revenue Fund, without the authorisation of the Treasury.”
In his response, the accounting officer indicated that it is unfortunate that treasury approval had not been obtained prior to the refunds being made, adding that efforts are being made to prevent a similar occurrence.
The accounting officer is required to submit an account of debt owing to the state for the financial year under review.
However, the accounting officer did not submit the statement in accordance with the reporting requirement of circular D12/2018 of the auditor-general.
Subsequently, the report states, he also did not comply with treasury instruction EA0500 which deals with the recovery of a debt to the state.
The same report shows that the accounting officer reported that the debit balance had an outstanding amount of N$41 267.54 as at March 31, 2018 and the subsistence and travelling (S&T) advance suspense account had a closing balance of N$456 860.12, resulting in an unexplained difference of N$415 590.58.
A similar finding was reported in the 2016/17 financial year; however, no improvement is evident, the report indicates.
In response to the report, the accounting officer indicated that the defence ministry agrees with the findings and a letter was addressed to the Ministry of Finance, but at the time of writing this report, no response was received.