Ruacana: Auditor-general Junias Kandjeke has issued an adverse audit opinion on the financial statements of the Ruacana Town Council for the financial year ended 30 June 2021, citing significant financial management weaknesses and non-compliance with public sector accounting standards. In a report submitted to the Speaker of the National Assembly this week, Kandjeke said the council's financial statements do not fairly present its financial position or performance.
According to Namibia Press Agency, the audit identified a discrepancy of N.dollars 4.5 million between the council's Build Together Housing Fund and the assets supporting the fund. The report also questioned the council's recorded investment of N.dollars 28.7 million in the Northern Regional Electricity Distributor (NORED), as auditors were not provided with a share certificate to confirm the existence of the investment.
The report further highlighted accounting irregularities relating to a grader purchased from the Ondangwa Town Council for N.dollars 217 391, which was recorded as property, plant and equipment despite the machinery not having been delivered to the council by the end of the financial year. Auditors also identified inconsistencies between the council's cash flow statement and its financial statements.
Administrative shortcomings were noted, particularly within the human resources filing system, which was described as poorly maintained. Incomplete personnel files made it difficult for auditors to verify documentation such as salary advice and other employment records. As a result, auditors were unable to confirm the accuracy of salary payments amounting to N.dollars 4.7 million due to missing staff record cards and salary advice documents.
The report also raised environmental compliance concerns, noting that the council does not possess a valid environmental clearance certificate for its dumpsite as required under the Environmental Management Act of 2007. The council further failed to submit several Value Added Tax (VAT) returns to the Namibia Revenue Agency within statutory deadlines and delayed the submission of some Pay-As-You-Earn (PAYE) payments.
The auditor-general also found that the council did not have a performance management system in place or an approved annual plan.