Tunis:Auditor-General Junias Kandjeke has issued an adverse audit opinion on the financial statements of the Kavango East Regional Council for the fiscal years 2022 and 2023, pointing to significant financial irregularities and management weaknesses.

According to Namibia Press Agency, Kandjeke's report, which examines the financial years ending on March 31, 2022, and March 31, 2023, uncovered unexplained adjustments totaling N$21.9 million in retained earnings. Additionally, discrepancies between asset records and financial statements exceeded N$29 million in prior reporting periods.

The report noted that the council did not include work in progress valued at N$45.4 million in its 2023 asset register, despite it being recorded in the financial statements. There was also a lack of supporting documentation for assets worth N$6.4 million disposed of in 2022, with an additional N$183,817 in asset disposals not disclosed in the 2023 financial statements.

Further discrepancies were found between the council's reported VAT balance for 2023 and the closing balance recorded by the Namibia Revenue Agency, with the council recording N$4.66 million compared to NamRA's N$190,871. A N$7.86 million discrepancy was also identified between the council's employee leave records and its accounting records.

Kandjeke's findings included the council's failure to disclose a pending court case with a potential liability of N$1.07 million in its financial statements. Governance concerns were raised, such as the absence of a signed performance agreement for Chief Regional Officer Ludgela Nangura and unsigned procurement meeting minutes.

Auditors were unable to validate the reported procurement execution rate of 68.25% due to missing supporting calculations and authenticated records. Weaknesses in fleet management were also highlighted, with only 20% of council vehicles undergoing scheduled maintenance, alongside incomplete fuel records and vehicle logbooks, increasing the risk of misusing public resources.

The Auditor-General recommended that the council develop a formal recovery plan, enhance financial reporting, and strengthen internal controls over procurement, asset management, and fleet operations to improve accountability and protect public funds.