Walvis Bay drowning in debt

WALVIS Bay is drowning in debts of close to N$20 million for water, electricity and other services rendered to residents and local businesses.

The bad-debt situation has necessitated Auditor General Junias Kandjeke to call for a turnaround strategy and the implementation of serious budgeting controls at the harbour town. “The Municipality recorded losses for four consecutive years,” Kandjeke said in the latest financial report for the town.The Municipality provided N$1,6 million for bad debts in the financial year that ended on June 30 2005.However, the debtors overdue by more than 120 days, or those who had been handed over for collection, owed a total of N$17 million.That was up from N$13,3 million the previous year and thus an under-provision of bad debts of more than N$15,3 million.The losses in the financial year amounted to over N$13,6 million – down from N$22 million the previous year.”The Office of the Auditor General is concerned about these losses, as they are already adversely affecting the cash flow of the municipality,” Kandjeke said.He said the value-added tax (VAT) account was also a mess, with an unreconciled debit balance amounting to over N$2,8 million which consisted of backdated transactions that were never claimed from the Receiver of Revenue.”Concern is also expressed that the municipality paid a private audit firm N$1 101 138 to investigate and correct the VAT transactions, whereas the municipality has an internal auditor and accountants in its employ.The expense was charged straight to the appropriation account, as it was not budgeted for,” he said.Kandjeke found that no Council approval for the transaction was submitted to the auditors.”The Municipality recorded losses for four consecutive years,” Kandjeke said in the latest financial report for the town. The Municipality provided N$1,6 million for bad debts in the financial year that ended on June 30 2005.However, the debtors overdue by more than 120 days, or those who had been handed over for collection, owed a total of N$17 million.That was up from N$13,3 million the previous year and thus an under-provision of bad debts of more than N$15,3 million.The losses in the financial year amounted to over N$13,6 million – down from N$22 million the previous year.”The Office of the Auditor General is concerned about these losses, as they are already adversely affecting the cash flow of the municipality,” Kandjeke said.He said the value-added tax (VAT) account was also a mess, with an unreconciled debit balance amounting to over N$2,8 million which consisted of backdated transactions that were never claimed from the Receiver of Revenue.”Concern is also expressed that the municipality paid a private audit firm N$1 101 138 to investigate and correct the VAT transactions, whereas the municipality has an internal auditor and accountants in its employ.The expense was charged straight to the appropriation account, as it was not budgeted for,” he said.Kandjeke found that no Council approval for the transaction was submitted to the auditors.