19 Nov 2018 19:40pm
WINDHOEK, 19 NOV (NAMPA) The National Councils Standing Committee on Public Accounts and Economy on Monday interrogated the Omaruru Municipality over a disclaimer audit opinion received from Auditor General (AG), Junias Kandjeke for the 2015/16 financial year.
A disclaimer opinion is given to institutions where the auditors were not able to obtain sufficient evidence to carry out an audit.
During this particular financial year, the municipality failed to meet a host of financial obligations.
A key finding by the auditors into the municipalitys books is a net loss of over N.dollars 4 million in addition to an accumulated loss of N.dollars 22.2 million.
Moreover, the municipalitys current liabilities exceeded its current assets by over N.dollars 8 million, casting doubt over its ability to continue operating.
What measures has the municipality put in place to reduce its financial losses? Peter Kazangominja, the committees chairperson asked.
Municipality chief executive officer (CEO), Alfons Tjitombo in response said the municipalitys revenue collection was very poor due to the absence of political office bearers.
The municipality got new councillors at the beginning of January 2016 and with the new transition, the implementation of revenue collection was delayed for that financial year, Tjitombo stated, adding that the municipality has now improved on its revenue collection.
According to the AGs findings, the municipalitys investments were understated by N.dollars 4.7 million, its provision of bad debts understated by N.dollars 2.9 million, while the opening balance for the development fund was understated by N.dollars 634 716.
About the understated investment account, Tjitombo noted that the investment is for capital projects funding from funds it receives from its stakeholders.
This is in a bid to ring-fence the funds so as to ascertain that there is no misappropriation.
However, the movement of the investment account with credits and debits during the period in question was not taken into consideration with the compilation of the financial statements, which resulted in the understatement, Tjitombo explained to the committee.
As remedial action, the municipality resolved to do monthly summary and recording of movement of the investment account to eliminate the error.
To the overstatement of bad debts, the CEO had this to say: Bad debt for the municipality is debt that is not recoverable and we did calculations accordingly, which resulted in an overstated amount of N.dollars 4 805 233 according to the auditors. The amount of N.dollars 1 956 031 as recorded by the auditors is acceptable to the municipality.
The municipality was asked to sit down and formulate its own method to calculate its bad debts.
During the session, Tjitombo maintained that most of the financial systems were not in place during the period in question, and that he only arrived at the municipality in May 2017.
He also pleaded for local authorities to be capacitated with the necessary human resources, particularly in their finance department in order to meet the required accounting standards.