Africa-Press – Namibia. Auditor general Junias Kandjeke has raised concerns over the Mariental municipality’s spending, which has shot up to over N$74 million.
Kandjeke suggested that this would have a negative impact on the municipality’s future ability to deliver services.
The municipality additionally incurred a deficit of N$74.7 million, compared to N$29.7 million in 2023.
Kandjeke recently revealed this in the municipality’s audit report for the financial year ended on 30 June 2024.
According to the report, the municipality’s current liabilities of N$223.6 million exceed its current assets of N$81.5 million by N$142 million at 30 June 2024.
A deficit occurs when a municipality’s expenses exceed its revenue during a specific accounting period.
“These conditions indicate the existence of material uncertainties which may cast significant doubt on the municipality’s ability to settle its obligations and/or maintain the sustainability of the current service delivery level in the normal course of business for the foreseeable future,” the auditor general said.
Kandjeke further revealed that the town’s management could not provide a plan on how to turn around its commercial insolvency and deficit in the foreseeable future.
This widening gap between revenue and expenses has resulted in alarming deficit figures that now pose questions about the municipality’s financial management and sustainability, he said.
Despite this concern, the municipality was given an unqualified audit report opinion, meaning its financial statements gave a true and fair view in all material respects of the financial position of the municipality, its financial performance and their cash flows for the year ended in accordance with International Public Sector Accounting Standards.
Mariental chief executive Paul Nghiwilepo yesterday said the town’s debt is of great concern, but they have put in place measures to reduce it.
He said in all localities, Mariental is among the few municipalities that are doing well in terms of submitting financial statements on time and addressing issues raised by the auditor general.
“We will be converting to prepaid water and electricity meters in July and September.
With this model we will address our debt crisis as it will be cheaper for residents and also help them avoid getting into unnecessary debts,” he said.
Nghiwilepo said over 2 900 prepaid meters are expected to be installed from July.
He said this is part of the town’s recovery process.
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