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Shiimi worried by municipalities’ poor financial records

FINANCE minister Iipumbu Shiimi said there is a need to strengthen capacity in local authorities, warning that it will affect service delivery to the people.

Shiimi recently tabled reports by the auditor general that are all qualified. These are financial statements for Tsumeb municipality 2020, Okahandja municipality 2021, Oshakati municipality 2020/2021, Usakos municipality 2019 and Okahao municipality 2020 financial year.

“Reviewing these audited reports, it flexes a certain concern of the auditor general and also myself. All these accounts are qualified. These financial statements are qualified by the auditor general. There is no municipality with an unqualified audit statement – all five and that points to a chronic problem that we have to debate at one point that there is a capacity problem at local authorities,” Shiimi said.

“Most of them, either transactions cannot be validated because if you look at different sources of documents, this source of document is saying this, the other source of document is saying that. The issue of asset registration, for instance, is something that is coming across for all of them. And this is pointing to a lack of capacity that we have to address going forward.”

Regarding Okahandja municipality, for the period ending 30 June 2020, auditor general Junias Kandjeke noted that the fixed asset register valued at N$77 662 705 does not classify the assets as per class of assets, but as per the type of financing used to purchase those assets.

“In addition, the assets are not tagged so that they are easily identifiable, thus the auditors could not trace assets physically verified from the floor to the asset register,” he said.

As for the Tsumeb municipality, for the period ending 30 June 2020, Kandjeke noted that auditors were unable to establish accuracy, validity, physical evidence and conditions of the property, plant and equipment, which had a net book value of N$79 379 051.

“This was due to the Municipality of Tsumeb’s failure to provide the auditors with a fixed asset register. The municipality did not disclose its open lands in the fixed asset register,” said the auditor general.

For Usakos, Kandjeke stressed that “no valuation and inventory count were performed at year end and as a result, there was no inventory recorded in the financial statements”.

With all the anomalies in the audited reports, Shiimi said “there is a need to zoom into the affairs of local authorities and strengthen their capacity”.

The minister warned that lack of capacity at municipality level will negatively affect service delivery.

“The delivery of services to our people will be hamstrung because they are closer to the people than the central government,” Shiimi said.

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