Okahandja municipality fails to balance the books

Accounting in a shocking state

14 June 2021 | Government

Okahandja local authority councillors were bypassed when the municipality presided over transactions amounting to at least N$90 million in 2019, a direct contravention of the Local Authorities Act.
The findings are recorded in the municipality’s 2018/19 financial year report tabled in the National Assembly (NA) for scrutiny by finance minister Ipumbu Shiimi this week.
The laws regulating local authorities state that key decisions such as the sale of land, spending of significant amounts, execution of capital projects or the writing off of debts can only be made through council resolutions approved by the line minister.
The contrary is true for Okahandja, where both the council and minister were circumvented.
During the FY under review, the municipality unilaterally wrote off N$52.7 million of unclaimed deposits. The auditors could also not obtain council approval for the increase in provision for bad debts of N$20.9 million.
Additionally, the municipality wrote off a N$3.7 million NaTIS claim.
“The auditors could also not obtain proof of council approval for manual correction of bank balance by N$10.6 million,” Kandjeke states.

Accounting woes
Okahandja’s accounting woes keep piling up. It understated its provision for doubtful debts of 120 days or older in the debtors’ age analysis by N$23.9 million.
“The auditors could not obtain a schedule of value-added tax (VAT) that substantiates the receivable balance of N$18 million recognised in the books of accounts receivables; therefore, no reasonable assurance regarding the existence, accuracy and valuation of the VAT receivable balance could be obtained,” Kandjeke says.
Further, it is recorded: “There is the improper accounting treatment of cheques written off at year-end but presented for payment amounting to N$4.3 million that were accounted for as bona fide payments instead of creditors as at year-end.”
He gave the municipality a disclaimer audit opinion, the worst there is.
“The financial statements do not present fairly, in all material respects, the financial position of the Municipality of Okahandja,” he said.
Contacted on Sunday, acting Okahandja chief executive George Mwazi declined to comment on the findings, saying he was new in the portfolio.

Political squabbles
For the better part between 2015 and 2019, the beleaguered municipality was a hotbed for political squabbles between its management and the Swapo-dominated council.
So bad were things that the then Johannes ‘Congo’ Hindjou-led council attempted, but failed, to chuck out then CEO Martha Mutilifa.
The council accused Mutilifa of gross insubordination while Mutilifa constantly debunked such accusations, maintaining the council was interfering in her administrative work.
In 2019, former urban minister Peya Mushelenga stepped in and dissolved the council in a bid to resolve the impasse which robbed the Garden Town’s residents of much-need services. – Nampa

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