• Government

Rehoboth (remains) in the red

- 2023-09-29 08:36:00

An accumulated deficit of almost N$37 million and liabilities that far exceed assets.
This is the bleak picture painted by the auditor general of the Rehoboth town council's accounts, which remained firmly in the red for the period 2017 to 2019.
The financial statements were also submitted late and not, as in terms of the Local Authorities Act, three months after the financial year-end.
The council did not have an asset register, which made it difficult to determine the accuracy and completeness of assets that were recorded.
An old valuation roll was also used for the determination and payment of rates and taxes, while a new roll was already announced in 2015. These rates are for the pocket of the town council. No inventory taking and related valuation was done in any of the three financial years covered in the report. A survey of water in reservoirs, as well as serviced and unserviced land offered for sale, was also not recorded.
The report repeatedly refers to "unexplained discrepancies" from the town council's payroll, value added tax, cash and home loans to income which in each case amounts to several million Namibian dollars.
No reconciliations were done on the town council's bank accounts, which led to inexplicable differences between the bank statement balances and the general ledger of almost N$100 million for the three years.
The same lack of reconciliation and supporting documents applies to the council's interim accounts whose amounts varied from N$66 million in 2017, N$108 million in 2018 and N$80 000 in 2019. The same tune of a lack of reconciliation and supporting documents is in the report recorded at home and employment loans, deposits and expenses. This includes a lack of any approval documents. The income from the sale of plots in 2019 stood at N$471 230, but was recorded on receipt and not, as required, on the transfer of the property. No list or register of plots or properties sold was submitted to support the related income.
With reference to rates for water, waste disposal and electricity, the wrong rates were charged in the related financial years.
Bulk power and water purchases as well as software expenses were recorded on a cash basis rather than on an accrued basis. Regarding the town council's cash flow, the report once again refers to "unexplained account entries".
The report makes it clear that the management of the town council is responsible for the preparation and fair presentation of the financial statements in accordance with acceptable standards and legislation.
The town council's management also has the responsibility to determine the entity's ability to do business.
"Those charged with governance are responsible for overseeing the entity's financial reporting process," the report states. – [email protected]