The Swakopmund Municipality has received an adverse audit report for the financial year ended 30 June 2021 from the Auditor General (AG).
An Adverse Audit Report indicates that a company’s financial statements are misrepresented, misstated and do not accurately reflect its financial performance and health.
The number of statements audited include; the statement of financial position, financial performance, changes in net assets, cash flows for the year then ended and a summary of significant accounting policies.
The AG, Junias Kandjeke in the report tabled in Parliament recently, indicated that the municipality does not have an acceptable accounting-reporting framework in place and the accounting policies were not included on the financial statements provided.
“Because of the significance of matters discussed in the Basis of Adverse audit Opinion, the financial statements do not fairly present the financial position of the municipality as at June 2021 and its financial performance and cash flows for the year then ended in accordance with fund accounting concept,” Kandjeke noted.
Furthermore, the AG found that the financial statements did not include a statement of changes in equity, which reconcile equity at the beginning and end of the period.
The audit also found that there were unexplained differences of N.dollars 61 829 464 and N.dollars 56 759 163 in 2020 in the statement of cash flow.
“Furthermore, the cash and cash equivalents at year end in the statement of cash flow amounted to N.dollars 10 993 169 while the cash and cash equivalents in the statement of financial position amounted to N.dollars 19 626 368 resulting in an unexplained difference of N.dollars 8 633 199,” he said.
Kandjeke, therefore recommended that the municipality ensure that they have an acceptable accounting reporting framework in place and that the accounting policies and reporting framework are disclosed in the financial statements.
Furthermore, it was recommended that the municipality ensure that the statement of changes in equity is compiled and forms part of a complete set of financial statements to be submitted to the Office of the Auditor-General.
An additional recommendation was also made that the municipality should ensure that cash equivalence balances amounts in the statement of cash flow agree to the statement of financial position.
Source: The Namibian Press Agency