Ruacana cannot account for N$4.7min salaries

Auditor general Junias Kandjeke says he is unable to confirm salary payments of N$4.7 million to Ruacana Town Council employees as there were no staff record cards.

This is contained in the auditor report for the year ended 30 June 2021.

The council received an adverse audit opinion as the financial statements do not fairly represent the council’s financial position.

“The auditors were unable to confirm the accuracy of salary payments amounting to N$4 743 825 as there were no updated staff record cards or salary advice to adjust employees’ salaries as per the approved salary adjustment.

This made it difficult for the auditor to confirm the accuracy of the salaries paid to employees,” Kandjeke says.

After auditors recalculated the depreciation on infrastructure assets using a useful life of 50 years, they found a difference of N$2.3 million between the depreciation recorded in the financial statements of N$3.3 million and the auditors’ recalculated amount of N$1 million.

Kandjeke says the auditors were not invited to observe the inventory count as at 30 June 2021.

Therefore, auditors cannot confirm the inventory or stock amount of N$136 559.

A difference of N$286 185 on repairs and maintenance was also observed between the trial balance and the financial statements.

Kandjeke says the reported allowance for doubtful debts of N$19 million, which is 90% of total receivables, is based on receivables aged 120 days or more.

The general industry practice among local authorities in Namibia, he adds, is to provide for all debtors falling in the age category of 90 days and above.

However, the auditors could not confirm the valuation of trade receivables.

The report also flags an amount of cash and cash equivalents at the end of the period disclosed in the statement of cash flows of N$843 155, which does not reconcile with the balance of N$400 561 presented in the statement of financial position at year-end.

“The council had recognised an amount of N$217 391 for a grader within work in progress, which the council purchased from the Ondangwa Town Council; however, as at year-end, the grader had not yet been delivered to the council,” Kandjeke adds.

The council also did not provide the auditors with a share certificate for the N$28.7 million investment in the Northern Regional Electricity Distributor; hence, auditors were unable to confirm the existence of such an investment.

The report reveals a difference of N$4.5 million between the council’s Build Together Housing Fund and the assets supporting the fund, indicating that the fund is not backed by sufficient assets.

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