Summary report of the Auditor-General on the accounts of the Government of Namibia for the financial year ended March 31 2012
Ministries/Offices/Departments of the Government of Namibia improved their financial performance.
In the previous edition the reasons for a qualified audit opinion on the State Revenue Fund were disclosed. In his summary report on the performance of the Ministries/Offices/Departments, the Auditor-General’s main findings were as follows:
The overall expenditure on all 31 ministries/offices/departments amounted to an under expenditure of N$ 1.5 billion or 4% of the total budget compared with an under expenditure of N$ 704 million or 2.56% in the previous year.
In terms of the State Finance Act, 1991, the Auditor-General has to draw attention to certain specified unauthorized expenditure which took place during the year under review. This unauthorized expenditure was as follows:
The expenditure on the accounts of three ministries/offices/departments exceeded the approver budget. The total excess expenditure on these accounts amounted to more than N$ 26.5 million. This compares with six accounts with excess expenditure totaling N$ 416 million in the previous year. There was thus a 93.6% decrease of excess expenditure in the financial year under review compared with a decrease of 16.6% in the previous financial year.
The main reasons for the excess expenditure have been explained by the concerned ministries as being due to unexpected cost increases, insufficient budgetary provision and virements not being approved.
A summary of the unauthorized expenditure in respect of the different votes where the total approved budget limits were exceeded contrary to Section 6(a)(i) of the Act, compared with two previous years, is as follows:
The Auditor-General once again recommended improved communication between the ministries/offices/departments with the Ministry of Finance and improved budget procedures and controls.
Exceeding the approved budget limits boils down to a disregard of the National Assembly’s powers to control the authorized use of taxpayer’s money for approved activities and up to specified limits.
Although the picture looks a lot better in this financial year when compared with the previous financial years, offices/ministries/departments should ensure that the necessary controls are in place to prevent excess expenditure of the total budget.
Excesses on main and subdivisions are also unauthorized as specified in the State Finance Act under Sections 6(a)(ii) and (iii) respectively. The following summary has been reported:
Excess expenditure of N$ 130 748 759.28 (2011: N$ 532 076 985.60) occurred on funds approved for 18 main divisions (25 in 2011) in the vote accounts
Excess expenditure of N$ 324 282 176.22 (2011: N$656 970 194.60) occurred on funds approved for 206 subdivisions (224 in 2011) of main divisions.
Five ministries/offices/departments (two in the previous year) managed not to incur any unauthorized expenditure and these are:
Office of the Auditor-General
Gender Equality and Child Welfare
Trade and Industry
Youth, National Services, Sport and Culture
2. Qualified audit opinions
Qualified (negative) audit opinions were expressed on the vote accounts of ten ministries/offices/departments compared with five in the previous year. Qualifications imply that the accounts concerned do not, in a material sense, fairly present the financial transactions. Five reports reflect a disclaimed audit opinion which implies that the Auditor-General was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.
This is not a good reflection and the Parliamentary Standing Committee on Public Accounts will certainly take a stern look at these office/ministries/departments. Unfortunately the audit report does not disclose the culprits nor the exact reasons for the disclaimed audit opinions.
Other summarized audit observations will be discussed in the next edition.