There is significant uncertainty over the ability of the city of Windhoek to pay its creditors for the foreseeable future, Auditor General Junias Kandjeke warned last week.
In the AG Windhoek Municipality’s 2019/2020 financial report tabled in Parliament last week, Kandjeke said that as of June 30, 2020, the municipality’s current liability of N $ 2.3 billion exceeded its assets. current N $ 1.2 billion.
He gave the municipality a disclaimer, which means that no opinion is given regarding a client’s financial statements because the auditor may not have been authorized or may not have been able to complete all planned verification procedures.
He said: “I think the evidence I have obtained is insufficient and inappropriate to provide a basis for my opinion.
Kandjeke listed various reasons for this, including tangible fixed assets overvalued by N $ N $ 32,776,050 (2019: 33,808,607) N $ N due to differences in property size and value between the fixed asset register and the electronic planner; no evidence that the municipality is implementing the asset management policy regarding the classification of properties;
properties under development by public private partnerships for sale are not included in the inventory as of June 30, 2020, and there are unsupported fund assets of N $ 206,362,649 (2019: N $ 177,879,230) presented as cash and cash equivalents in the reconciliation of funds that are neither separable nor identifiable from operating cash equivalents.
Kandjeke also said that “the annual financial statements submitted did not meet the requirements of international public sector accounting standards for the disclosure of gap analysis and accounting policy notes.”
The municipality recorded a deficit of N $ 103 million. Thus, there is a risk that the municipality will settle with its creditors in the normal course of business, Kandjeke said.
Also in the report, the MA said that the annual financial statements submitted by the city did not meet the requirements of the International Public Sector Accounting Standard for the disclosure of variance analysis and accounting policy notes.
Likewise, there has been no information audit performed by the city for the past five years on E-Venus for prepaid services, the CRS system for payroll and the TCS system for fines.
Likewise, Kandjeke said legal cases involving the municipality with a probable loss amounting to N $ 124,000 in 2020, as confirmed by lawyers for the municipality, had not been disclosed in the annual financial statements.
Namibian $ 8 million vehicle loans
The city has provided auto loans to city leaders to the tune of N $ 8 million. This was done in accordance with city policies, which allow senior executives to qualify for auto loans at an interest rate of 5% per annum, repayable over a maximum of five years.
Former Chief Executive Officer (CEO) Robert Kahimise took out a car loan of N $ 1.3 million in fiscal year 2018/19, and another N $ 443,360 in fiscal year 2019 / 2020. As of June 2020, Kahimise owed the municipality around N $ 1.2 million for the two loans.
Likewise, municipal police chief Abraham Kanime took out a car loan of N $ 55,820 in fiscal year 2018/19, and another of N $ 890,700 in fiscal year 2019/2020. In June 2020, Kanime owed the municipality N $ 327,582.
The city’s strategic framework for human capital and business services, George Mayumbelo, in fiscal year 2019/2020, took out a car loan of N $ 586,862, and N $ 324,313 was still outstanding. June 2020.
Likewise, the former strategic city of the Executive Department of Electricity, O’Brien Hekandjo, was granted a car loan of N $ 750,000 in fiscal year 2019/20, of which N $ 468,426 was still overdue in June 2020.
City Manager of Infrastructure, Water and Technical Services Ludwig Narib secured a loan of N $ 762,220 in FY 2019/20 and in June 2020 only N $ 51,556 remained .
Likewise, the strategic framework for urban planning and transport Pierre van Rensburg obtained a loan of N $ 450,000 during fiscal year 2019/20, of which N $ 83,391 was outstanding in June 2020.
Heavy payrolls Earlier this year, this newspaper reported that the city of Windhoek had resorted to flat-rate residents with tariff increases as council spending, including a payroll of N $ 1.5 billion, continued. to put pressure on limited resources.
Wages and salaries make up the bulk of the wage bill at N $ 785 million, followed by housing allowances at N $ 268 million, the medical aid fund at N $ 138 million and N $ 137 million. for pension contributions.
Acting CEO Mayumbelo said that although the payroll represents 35% of its budget, the city has only 2,535 employees, including 1,920 permanent, 615 temporary, 422 municipal police and 446 trainees.
During the presentation of the approved budget to the media in August, the interim CEO explained that the city is facing pressure due to limited resources and must therefore increase tariffs. Mayumbelo said that although the city’s financial year begins in July, this year’s budget was not approved by Urban and Rural Development Minister Erastus Uutoni until a month after the start of the new accounting year.
Caption: (City) Risk … The Auditor General’s office said there is significant uncertainty over the commercial insolvency of the city of Windhoek, putting resident services at risk.