AG gives disclaimer audit opinion to Okakarara Town Council

Auditor General (AG) Junias Kandjeke has given the Okakarara Town Council a disclaimer audit opinion after it failed to give him sufficient evidence on how it used taxpayer's money during the 2015/2016 financial year.

This information is contained in the council's 2015/2016 audit report which was submitted to the National Assembly (NA) by Deputy Finance Minister Natangwe Ithete on Tuesday.

I have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, I do not express an opinion on the financial statements, Kandjeke stated in the report.

The AG premised his findings on 19 discrepancies that were found in the books of Okakarara Town Council.

Chief among them is the unexplained suspense account with a debit balance amounting to N.dollars 3.1 million.

The auditors also found an unexplained difference of N.dollars 3.7 million between the computed expected interest on arrears income and the actual interest per general ledger.

The council omitted transactions in the financial statements amounting to N.dollars 8 million for government subsidy and payment of N.dollars 729 829 from the council's operational bank account was not recorded either in the cashbook or financial statements.

Kandjeke also found that the town council omitted its statutory liabilities in respect of import value-added tax (VAT), employee tax and VAT amounting to N.dollars 2.6 million while capital expenditures amounting to N.dollars 2.6 million are not reflected in its financial statements.

Further, the auditors also found a lack of bank reconciliations, the omission of inventories and unexplained salaries control to the tune N.dollars 369 529.

In addition, another hole that Kandjeke poked the town council's accounting process was the lack of a breakdown for the Build Together loans of N.dollars 5.3 million.

Additionally, Build Together loans and interest on arrears were understated by N.dollars 2.5 million.

Meanwhile, the levy payable to the [Otjozondjupa] Regional Council was understated by N.dollars 730 658 and no submission of VAT returns for audit purposes was made.

Investments were overstated by N.dollars 173 259 while water purchases were understated by N.dollars 348 217.

In the meantime, the council failed to provide supporting documentation amounting to N.dollars 2.2 million.

Kandjeke also found that the municipality failed in terms of debt collection and it does not have an accounting reporting framework in place.

The auditors draw attention to the financial statements, which indicates that the town council incurred a net loss of N.dollars 5 257 884 during the year ended 30 June 2016 and as of that date, the town council's current liabilities exceeded its current assets by N.dollars 1 289 548, Kandjeke concluded.

Source: Namibia Press Agency