By: Annakleta Haikera
More than N$105 million in income reversals at the Rundu Town Council (RTC) has come under intense scrutiny, with the council facing tough questions over financial irregularities and years of delayed financial reporting in the Kavango East Region.
The issue came under the spotlight during a public hearing on Monday by the Parliamentary Standing Committee on Public Accounts, which is examining the council’s long-outstanding Auditor-General’s reports.
According to Auditor-General Junias Etuna Kandjeke’s report covering the financial years ended 30 June 2018, 2019 and 2020, the council failed to restate its 2018 financial statements in respect of income reversals amounting to N$105,301,049 in the 2020 financial year.
The report shows that N$8,7 million was debited to water sales, while N$96,6 million was debited to interest revenue.
Kandjeke consequently issued an adverse audit opinion, stating that the financial statements did not fairly present the financial position of the council for the years under review.
The Auditor-General also raised concerns over the council’s accounting framework, financial disclosures, cash-flow reporting and compliance with accounting standards.
Among the deficiencies identified was the council’s failure to disclose contingency assets and liabilities, risk-management practices, gross debtors and related impairment provisions, as well as required information on related-party transactions.
Kandjeke further found that amounts disclosed as cash flows from financing activities; N$60,3 million in 2020, N$92,3 million in 2019 and N$44,9 million in 2018, were all non-cash items that had been incorrectly reflected in the statements of cash flows.
The council also came under fire for taking years to submit its financial statements to the Auditor-General.
The 2018 financial statements were only submitted on 18 January 2024, the 2019 statements on 25 March 2024, and the 2020 statements on 26 March 2024.
Kandjeke noted that this was contrary to Section 87 of the Local Authorities Act, which requires financial statements to be submitted within three months after the end of the financial year.
During the hearing, the Parliamentary Standing Committee on Public Accounts questioned the council over the prolonged delays, weaknesses in financial reporting and the management of its financial records.
Committee member Job Amupanda requested documents from the council to establish what happened to the outstanding financial information and whether previous audit recommendations had been implemented.
Amupanda also questioned the council’s reliance on consultants to prepare its financial statements and the lack of clear documentation relating to some previous consultancy arrangements.
Meanwhile, Hendrik Gaobaeb, chairperson of the Parliamentary Standing Committee on Public Accounts, said the committee would convene a meeting with the Rundu Town Council and require it to provide evidence explaining its failure to submit financial statements as required by law.
Gaobaeb said the situation was concerning because the submission of financial statements is a legal obligation under the Local Authorities Act.
“Submitting financial statements is a requirement under the Local Authorities Act. At the end of each financial year, local authorities are required to submit their financial statements to the Office of the Auditor-General,” he said.
He stressed that submitting the statements was not a decision left to the town council, but a legal obligation of the local authority.
Gaobaeb further said the committee was not satisfied with the responses provided by the council during the proceedings.
“Even when we were posing questions, the questions were not satisfactorily answered,” he said.
He said the Public Accounts Committee would meet after returning to Windhoek to determine when the Rundu Town Council would be summoned to appear before the committee and provide the necessary evidence.
The latest scrutiny comes as the council continues to face financial challenges. In February, Rundu Town Council CEO, Olavi Nathanael, acknowledged the council’s financial constraints.
More recently, Kavango East Governor, Hamunyera Hambyuka, reported that the Ministry of Urban and Rural Development had provided N$75 million to the council for infrastructure upgrades during the 2025/26 financial year.
The town council says they will be able to submit all outstanding financial reports before the end of this year.
The Rundu Town Council has received an adverse audit opinion for the 2018, 2019 and 2020 financial years.
This means Rundu Town Council’s financial records are misleading and can therefore not be relied on.
