Urban and rural development minister Erastus Uutoni has issued a cautionary message to local authorities regarding financial mismanagement.
Uutoni’s warning comes two days after the Anti-Corruption Commission (ACC) on Wednesday raided the Karasburg Town Council to investigate his complaints.
Uutoni’s sentiments are also reflected in the annual audit reports of most local authorities where funds cannot be accounted for.
“I want local authorities to focus strongly on financial management, as this is a significant issue,” he said.
Uutoni was speaking on Thursday while addressing councillors from 15 local authorities including Windhoek, Gibeon, Gobabis, Karibib, Katima Mulilo and Keetmanshoop, among others.
The City of Windhoek yesterday also signed cooperation agreements with 16 other local authorities.
Uutoni said there are instances where local authorities prepare budgets that appear sound on paper, however, when closely examined expenditure and revenue don’t balance.
“When budgeting, it’s essential to ensure that your estimates align with your actual collections. For instance, if the estimate suggests an 80% collection rate but by year-end the council has only collected 30%, we need to identify the problem.”
This is also reflected in the recently published finances of Henties Bay after auditor general Junias Kandjeke released a report revealing irregularities and non-compliance issues in 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.
For years now the local authorities have raised concerns with the auditor general’s (AG) office about the misappropriation of funds.
In July, the Swakopmund audit report by the Office of the AG revealed that there were financial discrepancies in the local authority of Swakopmund over the past financial year.
In June, the AG’s office also expressed concern over the municipality fund misappropriation. In March, the same concern was expressed over the local authorities of Karibib, Outapi and Omuthiya.
Uutoni posed critical questions, such as whether the issue lies with the economic foundation of the local authority, the capacity of its staff or the effectiveness of its councillors in motivating staff to perform.
He said local authorities must not rely on additional government funding to compensate for mismanagement.
Furthermore, Uutoni said local authorities should assess the qualifications, skills and knowledge of the individuals they hire.
“When managing a local authority, don’t prioritise individuals solely based on their political affiliations if they lack the necessary qualifications. If you neglect this aspect, it will ultimately impact the local authority’s performance,” he said.
Uutoni advised local authorities to make strategic decisions to ensure their sustainability and effectiveness.