Auditor general Junias Kandjeke has released a report revealing irregularities and non-compliance issues with regards to the Henties Bay municipality’s financial statements for the years ending 30 June 2020 and 2021.
Kandjeke said the audit, carried out in accordance with the International Standards for Supreme Audit Institutions, found there was failure to comply with the International Public Sector Accounting Standards (Ipsas).
“Based on these standards, a comparison of budget and actual amounts must be present for a set of financials to be complete,” he said.
“The auditors noted that there is no comparison of budget and actual, as well as notes that are explanatory, in other words trade receivables are not categorised as per ageing.”
Kandjeke recommended that the council ensures explanations for budgetary variances are included in the financial statements.
The audit also found discrepancies in the municipality’s land assets.
“The auditors have noted that unserviced land and serviced land was not recognised in the annual financial statement as at 30 June 2020, while there was no unserviced land recognised in the annual financial statements as at 30 June 2021,” Kandjeke said.
Information about the valuation of these lands was not available for inspection, preventing the auditors from obtaining appropriate evidence to confirm their existence and valuation.
Kandjeke urged the council to record and disclose all serviced and unserviced lands.
Another point of contention in the audit report was the lack of provision for rehabilitation of dump sites in the municipality’s financial statements for both audited years.
Kandjeke recommended that the council should disclose provisions for rehabilitating these sites in the financial statements.
The audit also identified misclassifications in the municipality’s accounting.
“Inventory for unsold erven amounting to over N$2,6 million was classified under property, plant, and equipment for the year ended 30 June 2021 as land, and not classified as inventory,” he said.
He underscored that in line with international standards, land or property held for sale should be classified as inventory, and urged the council to ensure proper account classes and compliance.
“The financial statements do not present fairly the financial position of the municipality of Henties Bay and its financial performance and the cash flows for the years then ended in accordance with Ipsas, said Kandjeke.
Henties Bay chief executive officer Elizabeth Coetzee refused to speak to the media, while mayor Lewis Vermaak said he would not be able to respond until the council’s management committee has seen the report, which is expected to happen later this month.
