Kahimise rapped over the knuckles
05 May 2017 | Government
Kahimise excused himself from the hearings in a letter submitted to the committee on Friday last week, informing the committee that he could not “account for issues raised in the report” as he had only been in the position for just over three months. Following brief deliberations, the National Council Standing Committee on Public Accounts and Economy suspended the public hearing, instructing Kahimise to be present at the next round.
The committee emphasised that as the current accounting officer of the City of Windhoek, it was Kahimise's responsibility to account for its financial affairs and it was mandatory for him to be present in person, despite his short tenure as CEO.
“To us as the committee, these are not sufficient reasons to believe that the CEO can be excused from these proceedings,” the chairperson of the committee, Phillip Shikongo said at the public hearing.
One of the key findings of the auditor-general's report for the financial year ending 30 June 2013, which Kahimise and his team would have been quizzed on, was the finding questioning the City's viability as a going concern and the threat of commercial insolvency.
“The City is currently commercially not viable and if allowed to continue unabated, the operating deficits will eventually erode the equity base which will result in the city being factually insolvent.”
Shikongo told the two City representatives sent by Kahimise to respond to queries on his behalf that according to the Act, the current accounting officer of the institution is charged with the responsibility of all the monies received and all payments made by the relevant local authority and is tasked to personally account for and respond to all queries levelled at the local authority by relevant bodies.
Shikongo said the council's decision to postpone the hearing was based on the assumption that “when an accounting officer has assumed duty, a proper handover has to be done. So I think he has inherited all the good and bad things of the institution and therefore, he was supposed to be here.”
He added that as the accounting officer, Kahimise was required to appear in person, and could not be represented, but could defer questions to accompanying staff members should the need arise during the next hearing.
At the meeting, the City's representatives were human resources officer Fillemon Hambuda and strategic executive for finance George Esterhuizen.
A number of questions had been slated for the meeting, with the CEO tasked to respond on key audit findings contained in the report of the auditor-general of the municipality's accounts for the financial year ended 30 June 2013.
The report notes that the provision for bad debts increased close to N$160 million in 2013, from N$150 million in 2012 and found that the council had adjusted provision for “doubtful debts with an amount of more than N$800 000”.
The key findings indicated an “unexplained difference of N$3 173 540” in the payroll reconciliation on which Kahimise and his team were expected to provide feedback.
The report found that the reconciliation of the VAT control account “revealed a material difference of N$2 162 175” for the financial year ending June 2013.
The report also drew attention to the statement of the municipality's financial position as from 30 June 2013 which indicated that as of that date, current liabilities exceeded current assets.
“These conditions indicate the existence of material uncertainties which may cast doubt on the City's ability to continue as a going concern. The condition is collaborated by the growing accumulated deficit of N$1.257 billion, indicating that the losses are accumulating over a period.”
The key findings in the auditor-general's report ending June 2013 also noted that the provision for staff leave was more than N$93 million for 2013 and 2012 “but no adjustments were made during the year” despite the policy for staff leave having been changed in 2012.
The auditor-general also noted that the financial statements were not submitted to the auditor-general within the stipulated three-month period after the end of the financial year.
Lack of supplemental documents also presented a problem for the auditing team.
Information could not be confirmed by the auditors for the motor vehicle schedule, list of vehicles, values and fuel consumption due to a lack of “relevant auxiliary records.”
Various “significant supporting documents on expenditure could not be traced” and compensation payments could not be confirmed due to a lack of supporting documents.
The report noted that the City of Windhoek should urgently address millions in recorded losses, primarily at the City Police department as well as losses of more than N$179 million at the transport department in order to avoid serious impact on the city's cash flow.
These and other issues will be addressed at the next meeting once the date has been finalised.