URBAN and rural development minister Erastus Uutoni has issued a cautionary message to local authorities regarding financial mismanagement.
Uutoni’s sentiments are also reflected in the annual audit reports of most local authorities of which 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.
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 do not 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, discovered the failure to comply with the International Public Sector Accounting Standards.