Lahja Nashuuta
The Rehoboth Town Council is one of the local authorities that received a disclaimer audit opinion for the past financial year, in essence failing to account for public resources entrusted to it.
Auditor General (AG) Junias Kandjeke noted that an audit could not be conducted on the performance information of the council for the financial years ending 30 June 2020, and 30 June 2021. He stated, “Consequently, I have nothing to report.”
These findings are detailed in an audit report signed by Kandjeke, and presented to Parliament last week.
It indicates that the Rehoboth Town Council did not submit its financial statements for the years ending 30 June 2020, and 30 June 2021, on time. The required statements were submitted only on 21 May 2024.
Kandjeke said the disclaimer resulted from the council’s failure to provide sufficient and appropriate audit evidence. Notably, critical financial documents such as the trial balance and a comprehensive general ledger were missing.
Further, the council failed to disclose uncertainties related to its going concern status as per IPSAS requirements. Financial statements revealed that current liabilities exceeded current assets by N$37.5 million in 2021, and N$26.8 million in 2020. The council also reported a net deficit of N$9.3 million in 2021.
While reported cash and bank balances appeared high, N$79.3 million in 2021 and N$77.8 million in 2020, most of these amounts were tied up in non-cash suspense accounts. The actual cash available for immediate use was significantly lower.
The audit also raised concerns over prolonged leadership gaps, with the town council operating under an acting CEO. Kandjeke warned that having acting personnel in key management positions posed significant risks to the council’s operational and financial stability.
The council has been strongly urged to recruit and appoint qualified personnel to critical positions.
Similarly, the Okahao Town Council missed the statutory deadline for submitting financial statements for the year ended 30 June 2023. The statements, required under Section 85 of the Local Authorities’ Act, were only submitted on 22 January 2024 well beyond the three-month deadline.
The audit found that the council implemented a new policy on travel and subsistence without submitting the relevant signed and approved minutes, nor did it seek the required endorsement from the line minister. This action contravenes Section 18(2) of the Local Authorities’ Act, which states that any council remuneration or benefits must not exceed amounts determined by the minister.
Moreover, Okahao Town Council does not currently have a strategic plan covering the 2023 period. Instead, on recommendation from the Office of the Prime Minister, the council continued using its outdated Strategic Plan from 2017/18 to 2021/22.
Although the strategic objectives remain aligned with the council’s mandate and national development goals, inconsistencies in key performance indicators (KPIs) were noted.
Eleven KPIs from the old plan were not carried forward, while 23 new ones were introduced in the 2023 annual plan, which were not reflected in the strategic plan.
Kandjeke emphasised that this failure to comply is also a violation of Section 26 of the State Finance Act.