By: Andrew Kathindi
The defence ministry lied about its relationship with corruption-tainted August 26, the Auditor General has revealed.
According to the AG, Junias Kandjeke, the defence ministry also paid salaries worth N$3 million to August 26 staff on behalf of its commercial arm for the past financial year without approval from the finance ministry.
This was contained in the audit report compiled by Kandjeke’s office for the financial year 2019/2020 and tabled in the national assembly last week.
In the same report, Kandjeke handed the defence ministry a qualified audit opinion.
This comes as the ministry’s commercial arm, August 26, has been embroiled in corruption scandals that led to former defence minister Peter Vilho.
“In my opinion, except for the effects of the matters described in the Basis for Qualified Audit Opinion paragraph, the financial statements of the Ministry of Defence as at March 31, 2020, are prepared, in all material respect following Section 12 & 12 of the State Finance Act, 1991 (Act 31 of 1991) and relevant legislation.”
A qualified audit report finds certain discrepancies in the financial statements prepared by the entity with such a report.
Therefore, deemed a qualified opinion on the accurate and fair view of the financial position as reported in the financial statements.
However, it is not poor as an adverse audit opinion, which indicates that a company’s financial statements are misrepresented, misstated, and do not accurately reflect its financial performance and health.
According to the auditor general, his report found that the ministry incurred salary expenses on August 26 Holdings (PTY) LTD, amounting to N$3,808,996.60 during the 2019/2020 financial year.
However, when his office enquired about the relationship between the defence ministry and August 26 Holdings Company, he was informed by the accounting officer that “the companies listed by the auditors do not receive any funding or are not subsidised from the State Revenue Fund.”
“The auditors were not provided with satisfactory answers why the ministry has to pay salary expenses on behalf of August 26 Holdings Company (PTY) Ltd, while it has indicated that there is no relationship with the said company.
Furthermore, no Treasure approval was provided for audit purposes as required by Section 17 (b) of the State Finance Act, 1991, which states that no payment shall be made as a charge of the State Revenue Fund without the authorisation of the Treasury.
According to the auditor general, the accounting officer indicated that a letter was issued to the finance ministry on September 28 2018, addressing discrepancies identified during the reconciliations. Still, no response was received, and no corrections were made when the audit report was compiled.
The auditor general’s report on the defence ministry also uncovered that all nine main divisions of the ministry were overspent with N$70,117,089.05 (1.19%), which was unauthorised, according to Kandjeke.
Earlier this year, Windhoek Mayor, Job Amupanda, accused the former defence minister, Vilho, of siphoning funds from August 26.
Amupanda alleged that the defence ministry bought naval ships and military uniforms from Brazilian companies at inflated prices without following tender procedures when Vilho was executive director of the ministry.
August 26 was established on August 14 1998, and is 100% owned by the Ministry of Defence.