Auditor General Junias Kandjeke has given an adverse opinion on Katima Mulilo Town Council’s 2020 financial year after it failed to provide documentation for investments into the Northern Regional Electricity Distributor (Nored) amounting to N$5.27 million.
Kandjeke also advised the council to get an independent valuator to ascertain the value of land to be disclosed in annual financial statements.
In addition, Kandjeke could not verify the existence of N$17 million in a suspense account because auditors could not obtain sufficient audit evidence. He further established that there was no bank reconciliation resulting in an unexplained amount of N$565,956 for cash and cash equivalents.
“It is therefore recommended that the council request for a valuation of the investment that is held in Nored and keep it on file. Also, reconcile the suspense account and re-allocate the items to other votes or accounts. However, for cash and cash equivalents, reconcile bank accounts every week to avoid differences, and it will help to resolve if any arises,” said Kandjeke.
Katima Mulilo Town Council was further found wanting for not submitting returns for value added tax which resulted in a difference of N$1.6 million, hence the Auditor General advised the council to timely submit returns yearly.
“In addition, the auditors noted that the control account and the amount disclosed on the face of the financial statements do not agree, resulting in a difference of N$2 million. Therefore, auditors could not obtain sufficient appropriate audit evidence,” stated Kandjeke.
The auditing team further revealed that the Council held a fruitless consultation exercise for the preparation of its financial statement amounting to N$186,326.
“However, the cost benefit of this expenditure did not meet the desired quality output raising concern of competency in this regard. It is therefore recommended that council should ensure that work done by external consultants is reviewed and agreed to financial data provided and the quality of work is scrutinised,” he said.
