The Auditor General has given Adverse Audit opinion for two consecutive years to the Namibian Agronomic Board for the financial years ending 31 March 2020 and 31 March 2021.
The adverse opinion means that the financial statements do not accurately reflect the financial performance and state of the company.
The agronomic board is responsible to facilitate the production, marketing and processing of controlled agronomic products, including vegetables and fruits, as well as overseeing the import and export of these products.
The auditor general found that there were no supporting documents for revenue of 8.3 million dollars reflected in the financial statements of 2020. The board could also not obtain outstanding invoices from the Agro-Marketing and Trade Agency (Amta), which was contracted to collect levies for vegetables and fruits and other agronomic products.
The auditor general also took exception with the cancellation of the contract with Amta without the Minister of Agriculture’s approval and also contravening the agency provisions.
However, the agronomic board maintains that the minister only has approval powers in terms of the conditions of the agency, but not its appointment as a collector of levies.
In the 2021 financial report in which adverse audit opinion is also expressed, the termination of Amta’s contract again features prominently.
The auditor general says the termination was done in contravention of the Agronomic Industry Act that states ‘’subject to conditions approved by the minister, to appoint persons as agents of the Board to assist in the performance of its functions and subject to a right of appeal to the minister, to refuse application of any person to be appointed as agent or to terminate the appointment of any person as agent’’.
The report further pointed out that the agronomic board did not disclose all levies and fees collected for the year ended 31 March 2021.
However, levy income amounting to 67.7 million dollars relating to the previous financial year is reflected. ‘’A summary of levies and fees disclosed in Note 8 of the financial statements shows that the total levies and fees collected during the financial year amounting to N$107 710 763,’’ the auditor general observed.
According to the auditor general income from levies was understated by N$39 986 966.
It is also recommended that the board does appropriate checks and regular reconciliations to avoid differences between the payroll summaries and general ledger or financial statements. This recommendation stems from the fact that the audit found a difference of N$3 938 466 between payroll summaries amounting to N$37 001 606 and the general ledger amounting to N$33 063 139 for employee costs.
The auditor general further found that the board did not provide supporting documentation for the remuneration levels for its senior managers, as their salaries must comply with Governmental Directives relating to remuneration levels set for state-owned enterprises as well as the salary scales of the organisation.
It was found that the CEO and the three senior managers earn way above the ceiling of a Tier 1 SOE, which is N$722 432. The total cost to company for the managers is to be an average of between N$900 000 to N$1 400 000 the report reflects. The board, the auditor general said, failed to provide the auditors with documents for the total cost to company for the general managers: Finance, Admin and HR, which was found to be above the directive.