Rundu blames skills gap for audit backlog

Rundu Town Council CEO Olavi Nathanael says the local authority relies on consultants to compile outstanding financial statements because its existing finance staff lack specialised skills to implement International Public Sector Accounting Standards (IPSAS).

Nathanael said having qualified accountants on the council’s payroll did not necessarily mean they were trained to meet the new reporting requirements.

IPSAS requires standardised, accrual-based financial reporting by public-sector entities, providing a clearer picture of public assets, liabilities, revenue and expenditure.

Rundu adopted IPSAS in July 2018 and was given three years to become fully compliant, according to the auditor general. The council’s 2020 financial statements should therefore have been fully compliant.

The transition forms part of broader financial reporting challenges facing the council, which is seven years behind on its financial statements and has faced criticism from parliamentarians over its reliance on consultants despite employing financial officials.

Nathanael said IPSAS created specialised skills requirements that existing staff were not necessarily trained to handle.

“When you go to school, you are taught to be an accountant; they don't teach you these specialised standards,” he said.

He stressed that he was not questioning employees’ qualifications, but their specialised training.

“They are not well trained on the system. I won't say they are not qualified, but trained,” he said.

Nathanael said the transition could not simply be handed to the finance department without the necessary expertise.

“It’s not like you just say, I know IPSAS,” he said. “There are things you must have in order.”

Complex, costly systems

He pointed to larger local authorities, including the City of Windhoek, saying some had spent millions on the transition. He claimed some had spent almost N$20 million, arguing that this demonstrated the scale of expertise and resources required.

He said the transition also involved complex work on property, plant and equipment, which could itself be costly.

The skills shortage is compounded by local authorities’ inability to offer competitive salaries, Nathanael said.

“We are struggling to attract the best knowledge like chartered accountants,” he said.

Rundu has proposed salary adjustments for local authority employees to make their remuneration more competitive, but the proposal remains with the ministry or Cabinet, he said.

Nathanael also pushed back against criticism that his administration had failed to address the financial reporting backlog.

He said it was unfair for parliamentarians to hold him responsible for reports that were outstanding before he took office in 2021.

Financial statements covering 2017 to 2021 were submitted under his tenure, he said, adding that he has been working to complete the remaining reports.

“It’s not like for my five years I’ve not done anything; I’ve been working on that,” Nathanael said.

The council appointed a consultant in June last year to help complete the outstanding audits, with the work expected to be finalised by October, he said.