Town councils stuck in audit limbo for almost 10 years

Namibian town councils have for years failed to submit credible financial records, drawing repeated audit disclaimers and raising concerns over mismanagement and poor oversight.

A disclaimer opinion is issued when an auditor is unable to obtain sufficient appropriate audit evidence, indicating poor record keeping or serious lapses in internal controls.

According to data from the auditor general for the 2015/16 to 2023/24 financial years, at least 17 town councils have received a disclaimer opinion during this period.

Several towns, including Khorixas, Bethanie and Katima Mulilo, received disclaimer opinions for consecutive years.

Auditor general Julius Kandjeke yesterday said a lack of dedicated staff was the biggest reason for inadequate bookkeeping as most councillors have duties elsewhere.

“The other reason is the leadership. Remember that most of the councillors, including the mayor, are on short-term contracts compared to administrators and chief executives,” he said.

Kandjeke expressed concern over non-compliance and urged town councils to get their houses in order as this affects service delivery.

Minister of rural and urban development James Sankwasa has pledged to bring an end to local authorities’ misconduct.

He is currently scrutinising some local authority documents flagged for unlawful practices stemming from land purchases and the misuse of funds.

CONSISTENT NEGATIVE OPINIONS

Audit reports on numerous town councils over the past decade reflect widespread financial mismanagement.

The Aranos, Bethanie, Katima Mulilo, Khorixas, Karasburg, and Outapi town councils have received mostly adverse or disclaimer opinions from 2015 to 2023.

Aranos chief executive Gerson Tjitarua yesterday said one of the issues that has led to this was the vacuum in administrative leadership.

“The long-vacant financial adviser and chief executive position could have been a factor,” he said.

Tjitarua said the town has been held back by inadequate staff, as well as the absence of an institutional regulatory framework to hold people entrusted with responsibilities accountable.

He assured they are working tirelessly with an appointed consultant to update the backlog in financial statements by the end of September.

MIXED BAG

While the Ondangwa, Omuthiya, and Oshakati town councils have received unqualified opinions for some years, several other councils, including Arandis, Bethanie, Helao Nafidi, Katima Mulilo, Khorixas, Nkurenkuru, Opuwo, Otjiwarongo, and Usakos have received ‘red cells’ from 2021 to 2024, indicating no submitted or audited reports.

‘CAPACITY NO EXCUSE’

Former Mariental mayor Billy Mensah says capacity should not be an excuse not to comply with outlined rules.

“There is no excuse for capacity. But the problem is the individuals working in town councils who chose to be greedy and misappropriate funds,” he says.

He says town councils should find alternative ways to bring their books to date by either hiring an audit team or awarding a tender to a company which could assist them in updating their books.

Former Walvis Bay councillor Gibson Goseb says the ministry should intensify its administrative re-education to ensure all local authorities under its regulatory mandate respond to the set requirements of annual audited financial reports.

“It paints a dull picture to know in this era of digital evolution that most employees in the finance departments lack the necessary capabilities to perform tasks to enable local authority compliance to even get a mere opinion from the office of the auditor general,” he says.

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