Omaruru finances under scrutiny
The National Council's Standing Committee on Public Accounts and Economy on Monday interrogated the Omaruru municipality over a disclaimer audit opinion received from auditor-general Junias Kandjeke for the 2015/16 financial year.
A key finding by the auditors was a net loss of over N$4 million, in addition to an accumulated loss of N$22.2 million.
A disclaimer opinion is given to institutions when auditors are not able to obtain sufficient evidence to carry out an audit.
During the 2015/16 financial year, the municipality failed to meet a host of financial obligations.
Moreover, the municipality's current liabilities exceeded its current assets by over N$8 million, casting doubt over its ability to continue operating.
“What measures has the municipality put in place to reduce its financial losses?” Peter Kazangominja, the committee's chairperson asked.
Municipality CEO Alfons Tjitombo said its revenue collection was very poor due to the absence of political office-bearers.
“The municipality got new councillors at the beginning of January 2016 and with the new transition, the implementation of revenue collection was delayed for that financial year,” Tjitombo said, adding the municipality has now improved its revenue collection.
According to the AG's findings, the municipality's investments were understated by N$4.7 million, its provision for bad debts by N$2.9 million, while the opening balance for the development fund was also understated by N$634 716.
About the investment account, Tjitombo said these were capital project monies received from stakeholders. He said the funds had been ring-fenced to ensure there was no misappropriation.
However, the movement of credits and debits during the period in question was not taken into consideration when compiling the financial statements, which resulted in the understatement, Tjitombo explained.
As remedial action, the municipality resolved to do monthly summaries and recordings of the movements of funds in investment account.
Regarding the overstatement of bad debt, the CEO said: “Bad debt for the municipality is debt that is not recoverable and we did calculations accordingly, which resulted in an overstated amount of N$4 805 233 according to the auditors. The amount of N$1 956 031 as recorded by the auditors is acceptable to the municipality.”
The municipality was also asked to sit down and formulate its own method to calculate its bad debts.
Tjitombo maintained that most of the financial systems were not in place during the period in question, and that he only arrived at the municipality in May 2017.
He also pleaded for local authorities to be capacitated with the necessary human resources, particularly in their finance departments, in order to meet the required accounting standards.
NAMPA
A key finding by the auditors was a net loss of over N$4 million, in addition to an accumulated loss of N$22.2 million.
A disclaimer opinion is given to institutions when auditors are not able to obtain sufficient evidence to carry out an audit.
During the 2015/16 financial year, the municipality failed to meet a host of financial obligations.
Moreover, the municipality's current liabilities exceeded its current assets by over N$8 million, casting doubt over its ability to continue operating.
“What measures has the municipality put in place to reduce its financial losses?” Peter Kazangominja, the committee's chairperson asked.
Municipality CEO Alfons Tjitombo said its revenue collection was very poor due to the absence of political office-bearers.
“The municipality got new councillors at the beginning of January 2016 and with the new transition, the implementation of revenue collection was delayed for that financial year,” Tjitombo said, adding the municipality has now improved its revenue collection.
According to the AG's findings, the municipality's investments were understated by N$4.7 million, its provision for bad debts by N$2.9 million, while the opening balance for the development fund was also understated by N$634 716.
About the investment account, Tjitombo said these were capital project monies received from stakeholders. He said the funds had been ring-fenced to ensure there was no misappropriation.
However, the movement of credits and debits during the period in question was not taken into consideration when compiling the financial statements, which resulted in the understatement, Tjitombo explained.
As remedial action, the municipality resolved to do monthly summaries and recordings of the movements of funds in investment account.
Regarding the overstatement of bad debt, the CEO said: “Bad debt for the municipality is debt that is not recoverable and we did calculations accordingly, which resulted in an overstated amount of N$4 805 233 according to the auditors. The amount of N$1 956 031 as recorded by the auditors is acceptable to the municipality.”
The municipality was also asked to sit down and formulate its own method to calculate its bad debts.
Tjitombo maintained that most of the financial systems were not in place during the period in question, and that he only arrived at the municipality in May 2017.
He also pleaded for local authorities to be capacitated with the necessary human resources, particularly in their finance departments, in order to meet the required accounting standards.
NAMPA
Comments
Namibian Sun
No comments have been left on this article