Arts Council Gets First Audit in Nine Years

Auditor general Junias Kandjeke recently told the National Arts Council of Namibia (NACN) its books for the financial years from 2013 to 2017 are a mess.

This may threaten it existence in future, he said.

The council’s financial woes have, however, been haunting it long before 2013.

A report from the auditor general for the year ending March 2013 found the council had failed to supply contracts and agreements for verification purposes, and advised the council to keep such documents safe for auditing purposes.

This trend appears to continue as stated in the latest audit report for 2013 to 2017, marking the first audit in nine years.

The auditor general gave the NACN an adverse opinion based on the fact that it has used an inappropriate financial framework and that its financial statements did not conform to the used standards.

An adverse opinion indicates that a company’s financial statements misrepresented, misstated and do not accurately reflect its financial performance and health.

The council was also rapped on the knuckles for not having a risk-management policy in place, exposing it to the risk of undetected fraud and errors.

The auditors found that the council does not have a fixed-assets policy in place either, and its fixed-asset register is incomplete.

According to the report, the council paid out study loans to the value of N$1,2 million in 2014 and 2015, yet these monies were not disclosed in its financial statements.

The council was also reprimanded for not submitting supporting documents for government grants of more than N$19,5 million for the 2013 to 2017 financial years.

No supporting documents were presented for grants and bursary voucher payments, or for study loan payments of more than N$1,2 million for the 2015/2016 financial year.

There were also no supporting documents for general expenditure by the council amounting to close to N$2 million between 2013 and 2017.

The auditor general found a difference of N$173 360 between the general ledger financial statements on interest received in 2017, while in 2015 this difference stood at N$239 936.

The auditors noted an unexplained difference of N$1,57 million in 2017, N$77 089 in 2016, N$247 463 in 2015, N$1 million in 2014, and N$355 772 in 2013 between the general ledger and financial statement.

“During the financial year of 2014, the council processed cheques of N$500 000 and N$62 700 for ad hoc and bursary payments respectively, however, no journal entries were provided to the auditors to support the cancellation. Unreconciled balances between the bank statements and the financial statements for cash and cash equivalents resulted in differences of N$196 277 in 2017, N$163 680 in 2014, and N$424 056 in 2013,” the audit report states.

NACN council chairperson Patrick Sam says the council under his leadership is committed to being accountable and ensuring systems are in place to guarantee this level of commitment.

“We were appointed after gross mismanagement had taken place and the prior council was suspended for three years. So our appointment occurred because of our ability as a council to restore accountability.

The main challenge is implementing systems and services that are in accordance with the required audit standards.

Initially, when we got in, there were no annual financial statements, no accountant, no system of accounting, no financial policies and procedures, no representative from the Ministry of Finance, no recorded transactions, and limited internal accounting systems,” he says.

Sam says in the last five years an accountant was seconded from the Ministry of Education, Arts and Culture to the council, and a new accounting system was introduced and financial policies were put in place at the same time.

The new council has also laid the foundation for internal audits, the provision of annual financial systems, bookkeeping and accounting processes, and governance policies guiding decision-making, he says.

“Obviously as noted in the audit, the NACN still has room for improvement, and we have just employed an audit and accounting firm to improve the financial accounting and audit of the NACN.

“Together with our finance committee, chaired by Immanuel Nashivela from the Ministry of Finance, we are ensuring all loose ends are fixed. An audit speaks to an organisation’s

ability to account for all aspects of its operations, so, we have made tremendous improvements so that the Office of the Auditor General can submit a report to parliament,” Sam says.

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