The Land Acquisition and Development Fund was established to administer funds appropriated by Parliament for the purpose of the Fund that is acquisition and rehabilitation of farms.
The Permanent Secretary of the Ministry of Lands, Resettlement and Rehabilitation is the Accounting Officer in terms of the Agricultural (Commercial) Land Reform Amendment Act, 2000.
In his report on the Fund for the financial year, which ended on 31 March 2010, the Auditor-General raised concern about the land tax income accounted for on a receipt basis. That means funds are only accounted for when they are received and not on an accrual basis.
Accounts should be sent out to record the revenue. The mentioned shortcoming led to unaccounted revenue to the amount of N$346 417. The auditors stated further that there are no internal controls in place to effectively monitor and control the total amount accrued.
According to the financial statements, farms to the value of N$23m were purchased during the 2010 financial year, compared to N$2m in the previous year. The Fund closed its books for the year with a surplus of N$59.3m compared to a surplus of N$79m in the previous year. The total accumulated funds mounted to N$250m of which N$26.4m are tied up in property, plant and equipment and N$10m in loans. N$213.4 was thus available in the form of cash and investments.
Unfortunately, the report does not mention any reasons for the rather low expenditure ratio related to the purchase of farms.
The land issue is quite a sensitive one in Namibia and it would be helpful if the report of the Auditor-General could indicate the number of farms purchased during the year, how much funds are committed towards farm purchases where purchase procedures are still underway and any problems experienced with such purchases. A performance audit in this area might also be helpful.
The Income and Expenditure statement reflects that N$14.9m has been spent on development costs for farms and N$603 780 on repairs.
Unfortunately, the report is not clear as to whether any costs were incurred on any farm training. N$1.2m was spent on consultancy fees but it is not clear for what exactly the consultants were needed. Training in the self-sufficiency of new farmers could help to alleviate the burden placed on the Fund.
Is the Namibia Tourism Board financially sound?
Yes, the Board’s financial situation is sound and stable. According to the unqualified report of the Auditor-General on the financial year ended 31 March 2010, the accumulated funds amounted to N$31m compared with N$17.3m in the previous year.
The net surplus for the year amounted to N$14.4m compared to N$ 4.9m in the previous year. This includes Government grants of N$32m for 2010 and N$27.6 in the previous year. The total income for 2010 amounted to N$60.3m whereas the total expenses were N$45.9m. In the previous year the total income amounted to N$49.5m and the expenditure N$44.6m. It is thus clear from the above-mentioned figures that the Board is dependent on Government grants.
Excess Government grants certainly contribute a lot to the stable financial position of the Board. It might be wise for the Government to review its grant policy in the sense that only shortfalls are covered with grants. Sources of revenue of the Board are very limited and to increase levies will be contradictive to the cost of accommodation in Namibia which may result in a decrease of tourists. Government grants will as such always be necessary but should be limited to actual shortfalls.