Controls at Keetmans inadequate - AG report

18 Nov 2013 16:50pm
WINDHOEK, 18 NOV (NAMPA) - The report of the Auditor-General on the Accounts of the Municipality of Keetmanshoop for the financial year ended 30 June 2012, reveals that the municipality’s accounting and internal controls were found to be inadequate.
The report, which was tabled in the National Assembly last week Thursday, states that while increased management involvement reduces risks, “the risk [also] arises that management and council override existing controls, a potentially dangerous practice, which the Council should vigilantly guard against.”
It said a material overstatement of loan balances amounting to N.dollars 3 823 089 were calculated for loans outstanding to the Government of Namibia.
The audit also found that a difference of 1,898 litres (l) of fuel was found due to an overstatement of petrol and diesel quantities at year-end, and that difference could not be explained by the municipality for the year under review.
The report noted that a material difference of N.dollars 331 324 on the reasonability calculation on consumer deposits were also found, while numerous travel and accommodation documentation or travel forms were not correctly approved and signed.
The water purchases reconciliation revealed a material difference of N.dollars 1 442 147, the Auditor-General’s office said, adding that the fixed asset register was incomplete even though it was maintained during the year.
Auditors recalculated Value Added Tax (VAT) reconciliation revealed a material difference of N.dollars 6 261 188. However, the necessary adjustment was made against the appropriation account to match a statement from the Ministry of Finance.
During the audit, the Namwater creditors reconciliation revealed a material difference of N.dollars 811 435 and the auditors' recalculated provision for leave days revealed an understatement of N.dollars 208 076.
The Auditor-General’s office also noted that numerous employees’ leave days exceeded 60 days, which is in contradiction with the Gazetted personnel rules of the municipality which states that vacation days with remuneration in excess of 60 days would lapse after each leave cycle.
An unexplained difference of N.dollars 77 929 was found on the payroll reconciliation while an unexplained difference of N.dollars 226 985 between the revenue receivable from the Namibia Traffic Information Systems (NATIS) and the ledger was calculated.
“Numerous customers were charged with wrong assessment rates and numerous customers' rental charges could not be matched to the Government Gazette rates,” the report states.
The report recommended the Municipality of Keetmanshoop to reconsider its policies towards the repayments of loans, saying all loan assets have been capitalised and no loan assets are disposed of on or before the loan is completely redeemed.
It said no details of houses that were sold on an installment basis during the year under review could be provided.
“All tariff adjustments were in accordance with the relevant official Government Gazette, although some customers’ rates were not appropriately adjusted. Only copies of original budgets could be obtained and relevant ministry approvals could not be obtained, thus reliance on validity and accuracy on budget figured could not be ascertained,” the report states.