The Ruacana Town Council’s Human Resource (HR) is in a mess, with a poor filing system, as well as failure to prepare salary advises and staff records, the Auditor General Junius Kandjeke said, as he gave qualified audit opinion to the local authority for the financial year 2019/20. Meanwhile for the year 2018/19 council got an adverse opinion for misstatement of its finances.
“The HR documents are not filed properly in the personnel files of respective staff members. Generally, the filing system is poor and not easily traceable. Also the department does not make advises for any changes to salary adjustments, staff movements and any other staff payment, neither are the records of employee records of salary scale and notches updates,” stated Kandjeke.
In addition, he said, the council has two salary structures, which have resulted in employees in same positions being on different salary scales.
Other than that, AG based his qualified opinion due to some misrepresentation and misstatement of finances related to accounts payable difference of N$304 386 which was observed and without supporting documents. A further variance of N$517 810 could not be accounted for in the financial statements and age analysis balance closing balances. N$463 406 was related to payroll earning and general ledger.
“Cash equivalent at the end of the year was not agreeing to the cash equivalent in the financial statement position, while a further difference of N$989 993 on funds and accounts was noted between 2019-20 relating to changes in net assets,” added Kanjeke.
Furthermore, the AG indicated that, the Ruacana Town Council had a total revenue of N$20 259 732, while its liabilities stood at N$5 707 968, Assets N$68 501 645, including expenses at N$27 733 828. Kandjeke could however not make a conclusive opinion of council’s Key Performance as the Strategic Plan with key indicators was not made available.
For the 2018/19 financial year an adverse opinion was expressed by AG, similar reasons related to HR sluggish operations. In the same vein, he noted the council did not have a financial reporting framework. A depreciation amount of N$9 076 462 and N$7 046 955, respectively was recorded as a result of missing asset registers and purchase dates, therefore recalculations could not be done.
The audit report further revealed that, N$801 424 in accounts payable could not be accounted for, as well as a N$135 882 related to surcharge received from Nored.
Adverse opinion indicates the company’s financial statements are misrepresented, misstated, and do not accurately reflect its financial performance.