The Ministry of Industrialisation and Trade failed to fully utilise its N$175 million budget allocation during the 2020/21 financial year due to failure to close its skills gap, latest findings by the Auditor General (AG) have revealed.
AG Junias Kandjeke said the Trade Ministry only utilised N$168 664 175 out of a budgeted N$175 486 000.
“Going forward, accounting officers should not bargain much more than they can chew. If specific activities are expected to exceed budgeted funds due to unforeseen circumstances, funds should be viremented (transferred from one budget to another) from activities where savings are expected,” he warned.
The AG apportioned the under expenditure to vacant high-ranking positions, which could not be filled timely due to lack of specialised skills, retirements and delays in vetting.
Covid-19 was also flagged as another stumbling block to the full utilisation of the allocation, as some planned trips had to be cancelled.
On the other hand, equipment meant for small and medium enterprises (SMEs) could not be procured due to foreign trading policies which requires 50% deposit. Therefore, the government could not proceed, as it is against the State Finance Act and treasury instructions.
“The stated reasons had a direct contribution to savings realised under the employer contribution to Government Institutions Pension Fund. In the same vein, a number of planned activities were put on hold to facilitate the procurement of Covid-19-related detergents, soap and cleaning chemicals in an effort to fight the disease,” he explained.
“While a number of activities were cancelled or rescheduled due to the pandemic, resulting in less vehicle fuel consumption and maintenance cost, there was also no major maintenance undertaken as anticipated on the ageing ministerial headquarters, significantly reducing the cost.”
During the period under review, the Minister’s office spent N$158 659 as “a result of personal assistant who was recruited mid-year”.
According to the AG report, other Ministry departments that underutilised their budgets include the Directorate of General Services (N$1 996 374) Industrial Development (N$1 842 996), Namibia Investment Centre (N$1 321 430)and Directorate of Commerce (N$1 321 430).
Meanwhile, Kandjeke said auditors discovered that the trade ministry had no disaster risk recovery plan, in the event of emergency.
“In the absence of a plan, it raises fears because there is no system in place to provide guidance to resuscitate operations. The disaster recovery plan is an integral part of the overall risk management of the ministry. Since all of the risks cannot be eliminated, management should implement a disaster recovery plan to prepare for potentially disruptive events. This is important because it provides detailed strategies on how to continue after severe interruptions and disasters,” he cautioned.
“In the event of a disaster, continued operation of the office depends on the ability of the information technology systems and data.”
Though the Ministry received an unqualified audit opinion, meaning financial statements were done in a fair and appropriate manner as per the Financial Act, AG advised it to conduct annual stocktaking as no such exercise was undertaken under the 2020/21 financial year.
Kandjeke implored accounting officers to undertake such as a matter of priority, because it is a requirement, as per the treasury instruction KA 0901.
The trade ministry was further graded for a qualified audit on the aspect of Key Performance Indicator, for having attained between 70 and 100% in implementing and achieving the set goals.
