AUDITOR General (AG) Junias Kandjeke has given Omaheke Regional Council an adverse audit opinion for failing to present him with a fair reflection of the entity’s financial transactions for the financial year ended 31 March 2018.
Kandjeke is confident that the audit evidence he obtained is sufficient and appropriate to provide the basis for the opinion which is being expressed due to the following findings:
Absence of acceptable financial reporting framework applicable to public interest entities and unexplained difference of one million dollars in VAT Receivable.
· Double recognition of revenue (rates and charges fees) amounting to N$352,311 and inventory overstated by N$696,335.
· Non-submission of supporting documents for 5 percent rates and levies from local authorities amounting to N$ 673 956 and Surcharge fees from CENORED of N$584,728.
· The Auditor is also not impressed with non-disclosure of bank accounts to the value of N$21,912.
· Failure to submit supporting documents for expenditure amounting to N$764,105.
The AG further expressed his displeasure with the continuous use of consultancy services at N$160,000 per month.
Kandjeke said that the accounts were submitted later than the required date that is three months after the financial year end.
In his opinion because of the significance of the matter discussed in the Basis for Adverse Audit Opinion paragraph, the financial statements do not give a true and fair view of the Omaheke Regional Council as at 31 March 2018, and their financial performance and cash flows for the year, in accordance with the applicable financial reporting framework and the Regional Council Act, 1992.
Kandjeke also expressed scepticism about the existence of risk of material misstatement of the financial statements whether due to fraud or error, design and performed procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for an opinion.
‘’The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls,” he explained.