The Auditor General could not establish the accuracy, validity and physical existence and condition of the property, plant and equipment for the Katima Mulilo Town Council (KMTC), which had a net value N$66 642 381. In addition, the auditors could not obtain any audit evidence to verify the Build Together loans of N$2 891 241, said Junias Kandjeke, giving KMTC an Adverse Audit Opinion for the 2019 financial year.
“This was due to the Katima Mulilo Town Council failing to provide the auditors with an appropriate fixed asset register. It is recommended that the Council update and maintain their fixed asset register on an annual basis. In terms of Build Together, it is recommended that Council ensures that all supporting documents are provided for audit purposes,” said Kandjeke.
Furthermore, the audit report established that there were no supporting documents to substantiate the sale of erven amounting to N$2 886 200. Kandjeke also flagged bad debt and irregularities on the trade receivable, after the council could not explain the difference of N$65 231 837.
“There is no provision for impairment of trade receivables stated in the financial statements. The age analysis for trade receivables reflects an amount of N$71 112 625, whereas the financial statements reflected an amount of N$5 880 788, of which council could not provide an explanation. It is therefore recommended that the Council reconcile its trade receivables balances so that its balance as per the age analysis agrees to that of the financial statements,” it is further recommended that the Council should explain any differences between the age analysis and the financial statements, he said.
There were also no supporting documents to verify trade payables amounting to N$29 655 600, whereas the bank records were in shambles as no proper bank reconciliations were available for audit purposes, “therefore, the auditors could not carry out audit procedures.”
Kandjeke could not verify the difference of N$2 738 336 between the Value Added Tax control account and the submitted returns. It is recommended that the Council reconciles the VAT control account to agree with the submitted VAT returns. In terms of investments, no share certificates or other supporting documents for the investment in NORED worth N$3 484 165 could be provided.
“It is recommended that the Council clear all suspense accounts, provide any supporting documents relating to suspense accounts and to explain all the balances making up its suspense accounts,” he suggested.