Albertina Nakale Windhoek-Khomas Regional Council has been grilled over N$824,774 for government subsidy, which was incorrectly recorded as revenue rather than retained income among other irregularities such as non-submission of Valued Added Tax (VAT) returns. The council appeared before the Parliamentary Standing Committee on Public Accounts and Economy yesterday following irregularities pointed out in its 2015 financial report audited by the Auditor General Junias Kandjeke. Kandjeke found out that the N$824,774 should have been recorded as revenue for the previous year. However, in an effort to correct this error in the year under review, the council incorrectly credited revenue instead of retained income. This resulted in overstatement revenue in the year under review. Further, an amount of N$7.5 million for government grants received was incorrectly recorded as revenue of deferred income (capital project fund liability). Therefore, the council was called for a public hearing to appear before the Parliamentary Committee, where committee chairperson NUDO MP, Peter Kazongominja asked the management to provide proof of corrections made to the wrong posting, as recommended by the auditors. Khomas chief regional officer Clement Mafwila said the amount in question was in fact part of an opening bank balance for the account of rural development projects. He said the account was incorporated in the council’s chart of accounts during 2013/14 financial period, but instead of capturing the closing balance of N$902,345 at March 31, 2014, only an amount of N$77,571 was recorded. Mafwila concurred with the auditors that in 2014/15 the deference of N$824,774 should have been captured under retained income and not under revenue, as the funds were received in a prior financial period. “The council concur that there was a wrong posting with regard to the N$7.5 million. These funds were received from the National Planning Commission for the construction of services at Groot Aub. “The council performs bank reconciliations for all bank accounts on a monthly basis to ensure accurate and complete records. Capacity-building was provided for through on-the-job training and two weeks’ training on Pastel Evolution accounting system,” Mafwila said. Swapo committee member Gerhard Shiimi MP also wanted Mafwila to explain why the lease contracts of tenants at Park Foods Shopping Centre were kept by the administrator before being transferred to the council. Mafwila said the lease contracts of tenants were kept by the agent, who was the administrator of the shopping mall. He maintained that the council took over the management of Park Foods and the lease contracts for all tenants are now available. He added that council has appointed a debt collector to collect all outstanding debts on behalf of council and also implemented a computerised billing system for the tenants. Swapo committee member Joseph Mupetami MP asked whether a meeting arranged between City of Windhoek and the regional council, as well as representatives from the office of the Auditor General ever took place to reach an understanding on the issue of the 5 percent levy. Mafwila said the city pays the 5 percent levy based on the amount they collect from ratepayers, instead of the billed amount as required by the Act, as they simply cannot pay what they have not received. He promised the council would request a monthly billing statement from the City of Windhoek to ensure accuracy of the 5 percent revenue. Swapo MP Cornelius Kanguatjivi asked why the council failed to submit VAT returns during 2015, in response to which Mafwila said they sought professional services and in consultation with the Receiver of Revenue were attending to the issue and working on submitting all outstanding returns to the Receiver. Swapo MP John Likando asked the council to explain unrecorded liabilities from the Receiver of Revenue amounting to N$1.52 million for penalties and N$1.3 million for interest. “The council concurs with the finding and confirms that the stated amounts comprise of penalty and interest charged that emanated from the non-submission of VAT returns by the regional council. “The council has settled that tax balance and made arrangements to make monthly installments to the Receiver of Revenue. The council has applied to the Receiver of Revenue for a waiver of penalties and interest,” Mafwila noted.
2017-11-16 09:27:41 10 months ago