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Diamond fund slammed over misleading financials

Auditor general Junias Kandjeke has criticised the Diamond Valuation Fund for submitting misleading information about its financial position during the 2021 and 2022 financial years.

In the audit submitted to the parliament yesterday, Kandjeke said the fund was given an adverse audit opinion for providing flawed financial statements and no supporting documents for levies.

In 2021, the fund reported it was owed N$29,5 million, but Namdeb confirmed only N$13,1 million.

This means there was an error involving N$16,4 million.

Similarly, in 2022, the fund claimed it was owed N$46,6 million, but Namdeb confirmed only N$13,1 million, resulting in a larger error of N$33,5 million.

Additionally, the fund was unable to provide supporting documents for levies amounting to N$22,6 million for the 2022 financial year.

On top of that, the auditors discovered that N$13,7 million in levies from Namdeb were not recorded in the 2022 financial statements.

Further discrepancies were found in the total equity figures.

In 2021, there was a difference of roughly N$67,8 million between the general ledger (N$74,4 million) and the statement of financial position (N$6,6 million).

In 2022, a similar issue was observed, with a difference of around N$3,9 million between the general ledger (N$69,9 million) and the statement of financial position (N$73,8 million).

Kandjeke also raised concern over the fund’s overstatement of revenue in 2022.

He said during the year, the fund recognised revenue (levies) from Namdeb based on the total revenue on notice to sell without taking into consideration the waiver agreement of 50% on royalty between Namdeb and the government.

This resulted in a difference of about N$14,9 million, which Kandjeke said is an overstatement of revenue.

He said his office could not conduct a performance audit on the fund as it did not have a strategic or annual plan at the time of its financial audit in 2021 and 2022.

The fund falls under the Directorate of Diamond Affairs in the Ministry of Mines and Energy.

It was created under the Diamond Act of 1999, with the aim of covering the costs of valuing diamonds.

The money for this comes from a percentage of the duties or royalties on diamonds.

Diamond commissioner Miina Auene-Gahutu is yet to respond to the concerns raised in the audit report.

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