By: Andrew Kathindi
The City of Windhoek had legal cases involving the municipality with a probable loss amounting to N$123,954,191 for 2019 and 2020, but not disclosed in the municipality’s books.
This is according to auditor general Junias Kandjeke, who said the City’s legal cases were confirmed by the municipality’s lawyers and were not disclosed in the annual financial statements.
This and other discrepancies led to the auditor general being unable to provide the City with an audit opinion for its latest available audit report for the 2019/2020 financial year. The financial statements for the 2019/2020 financial year were also submitted late, only on 23 April 2021, to the auditor general’s office.
“I have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, I do not express an opinion on the financial statements,” says Kandjeke.
“I believe that the audit evidence I have obtained is insufficient and inappropriate to provide a basis for my opinion.”
Kandjeke also found that properties being developed by private, public partnerships for sale were not included in the inventory as of 30 June 2020.
The municipality was in partnerships with various development companies during the 2019/2020 financial year, with the sole purpose of speeding up the land delivery process and addressing the high demand for serviced land.
Developments were in various phases of completion at the time that Kandjeke compiled the report.
“The agreements entail that upon completion of works of each section, the developer hands over completed works in accordance with the agreement. The handed over works fulfils the requirements of IPSAS 23 on revenue from non-exchange transactions,” he said.
The total value of works completed and handed over from infrastructure from PPPs during 2020 was N$112,603,004 compared to N$0 in 2019.
The auditor general said there is no evidence that the municipality is implementing the asset management policy regarding the classification of properties.
There are unsubstantiated fund assets of N$206, 362, 649 (2019: N$177, 879,230) disclosed as cash and cash equivalents in the statutory funds’ reconciliation that is not separable nor identifiable from the operating cash and cash equivalents of the municipality as the funds are not held in designated bank accounts for the statutory funds.
According to the books, bank overdrafts were overstated by N$191,325,874 and accounts payable understated by N$191,325,874 due to subsequent payments, which were incorrectly recorded as payments made to suppliers at year-end.
“The annual financial statements submitted did not meet the requirements of the international public sector accounting standards regarding the disclosure of variance analysis and accounting policy notes.”
Kandjeke noted that Windhoek, like many other organisations, was not spared by COVID-19, with the City’s cash flow negatively affected during the last quarter of the year ending 30 June 2020. However, it stabilised after as the residents slowly adapted to the new normal.
“The debt book had increased from N$840 million on 31 March 2020 to N$1 billion on June 2020, and settled at N$968 million on 28 February 2021.”
In that same period, the City paid out N$4.1 million for the former CEO Robert Kahimise, which included an annual remuneration of N$2,124,113 or N$177 000 per month, a N$173 965 13th cheque, medical and pension funds contributions at N$542,483 and other allowances worth N$1,296,054.
The City’s nine strategic executives were also paid a combined handsome amount of N$26,878,116 for the 2019/2020 financial year, while the municipality’s 14 councillors were paid a combined N$8,525,874 million for the same financial period.
The City also gave Kahimise a vehicle loan worth N$443,360, executive of the electricity department O’Brien Hekandjo valued at N$318,458 and the late Reckliff Kandjiriomuini valued at N$527,653.
In the 2018/2019 financial year, loans to executives amounted to N$6 million.
BOX THIS INFO
Former CEO Robert Kahimise – 2019/20
- Paid N$4.1 million
- An annual remuneration of N$2,124,113 or N$177 000 per month
- A 13th cheque of N$173 965
- Medical and pension contributions of N$542,483
- Other allowances worth N$1,296,054.
The City’s 9 Strategic Executives – 2019/20
- A combined annual salary of N$26,878,116
- 14 councillors received a combined N$8,525,874
Car Loans
- Kahimise vehicle loan worth N$443,360
- O’Brien Hekandjo, executive of the electricity department N$318,458
- the late Reckliff Kandjiriomuini’s N$527,653.
Executive loans for 2018/2019 amounted to N$6 million.
