Defence hits back at AG audit
The defence ministry says delays in international payments for aircraft parts, coupled with exchange-rate fluctuations, caused a large discrepancy in its audit report.
27 September 2018 | Government
The audit report, which was tabled in parliament, indicated that the ministry had paid N$198 million for maintenance and parts for military aircraft in 2017.
However, the ministry says this figure actually stood at N$230 million.
The audit could only verify a total amount of N$60 million from the expenditure vouchers presented for auditing purposes. According to the audit this resulted in an unexplained difference of N$138 million.
The permanent secretary of defence, Rear Admiral Peter Vilho, said it was explained to the auditor-general's office that the correct expenditure for maintenance and parts of military aircraft actually amounted to N$230 million.
This, therefore, exceeded the previously reported figure, he said.
Vilho said the reason for this difference was that foreign currency payments take time to process through the finance ministry, the Bank of Namibia (BoN) and the respective international banks.
“These high-value foreign currency transactions can only be posted by the finance ministry on the general ledger upon receipt of confirmation from the Bank of Namibia, when the recipient confirms the receipt of the funds,” Vilho said.
The auditor-general's office was informed that the defence ministry can make all expenditure vouchers available for verification and an audit for the N$230 million, as well as a list of the transactions that were attached an annexure to the responses of the ministry on 6 April, he said.
He said the auditor-general's office was also informed that the finance ministry unilaterally suspended an amount of N$653 million from the ministry's 2016/17 appropriation, thus explaining the N$185 million overspending.
This presented 3.12% of the ministry's revised total budget allocation of N$5.9 billion.
The ministry also did not agree with the finding of the auditor-general with regard to the number of subdivisions and amounts considered as unauthorised expenditure, because of the differences between various general ledger reports, which was also reported to the finance ministry on 31 March, with no action being taken.
The auditor general's report found that the defence ministry had N$400 million in unauthorised spending on its books.
Furthermore, the ministry disagrees with the finding of the auditor-general with regard to donations.
The audit found the ministry failed to reveal the donation of vehicles it received from the German armed forces technical advisory group, worth N$1.7 million.
According to Vilho, the vehicles and equipment received as a donation, valued at N$1.3 million, were reported during the 2015/16 financial year. He says treasury approval was granted on 11 February 2016 and that was attached as an annexure.
However, the ministry admitted that a Toyota Quantum minibus valued at N$3.7 million and a Bell tractor-loader-backhoe (value unknown) were not included in the treasury authorisation request, and was also not reported, which was an oversight.
Vilho said the ministry's execution rate for the projects under review stood at 96.1%.
“In conclusion, all the audit findings as addressed in this statement were exhaustively interrogated and disputed during the audit exit meeting held at the defence ministry's headquarters on 27 July, between senior staff members of the Office of the Auditor-General and the ministry. The auditor agreed to some errors and stated that it was too late to withdraw the statements, hence the audit report was presented in parliament,” added.