{"id":80210,"date":"2024-11-07T06:30:00","date_gmt":"2024-11-07T06:30:00","guid":{"rendered":"https:\/\/www.africa-press.net\/namibia\/all-news\/city-financially-at-sixes-and-sevens-kandjeke"},"modified":"2024-11-07T06:30:00","modified_gmt":"2024-11-07T06:30:00","slug":"city-financially-at-sixes-and-sevens-kandjeke","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/namibia\/all-news\/city-financially-at-sixes-and-sevens-kandjeke","title":{"rendered":"City financially at sixes and sevens \u2013 Kandjeke"},"content":{"rendered":"

Africa-Press – Namibia. <\/strong><\/span>Auditor general Junias Kandjeke has uncovered substantial financial and operational challenges facing the City of Windhoek, highlighting issues which may threaten its financial sustainability.<\/p>\n

Perhaps the most critical finding is the municipality\u2019s apparent state of commercial insolvency, as their current liabilities have consistently outpaced their assets.<\/p>\n

As of 30 June 2023, the municipality reported liabilities amounting to N$1.8 billion against current assets of N$1.1 billion, leaving a shortfall of more than N$723 million.<\/p>\n

In 2022, the deficit was even higher at N$1.1 billion.<\/p>\n

The report further indicates that the municipality incurred an annual deficit of more than N$344 million in 2023, and more than N$734 million in 2022, further aggravating their financial stability.<\/p>\n

\u201cThese conditions indicate material uncertainties that cast significant doubt on the municipality\u2019s ability to meet its obligations or maintain its service delivery levels in the foreseeable future,\u201d Kandjeke said.<\/p>\n

Despite these pressing concerns, the municipality has yet to provide a plan for turning around this deficit to achieve financial sustainability, the worried AG reported further.<\/p>\n

His report also noted discrepancies between the budgeted and actual financial figures, suggesting the existence of financial planning challenges.<\/p>\n

For instance, revenue from traffic fines and outdoor advertising fees exceeded expectations, while other sources such as water and electricity tariffs fell short.<\/p>\n

Additionally, delayed project implementation due to late budget approvals contributed to both savings and unfavourable variances.<\/p>\n

Kandjeke\u2019s findings cover the financial years ending 30 June 2022 and 2023.<\/p>\n

Transparency<\/p>\n

They further indicate ongoing problems with transparency, compliance and operational deficits, casting doubt on the municipality\u2019s financial management practices.<\/p>\n

One of the primary concerns in the report is the municipality\u2019s failure to disclose its accounting policies related to public-private partnership (PPP) transactions.<\/p>\n

\u201cThe financial statements do not disclose the accounting policy for PPP transactions, and there\u2019s no record of the transactions and balances associated with these partnerships,\u201d Kandjeke stated.<\/p>\n

This lack of documentation obstructed the auditors from verifying essential figures related to property, plant, equipment and loans connected to PPPs, compromising the transparency of municipal assets and liabilities.<\/p>\n

This gap in accounting practices also led auditors to question the municipality\u2019s accumulated surplus and financial accuracy.<\/p>\n

\u201cWithout these disclosures, it\u2019s impossible to assure the public of the fairness in the presentation of the financial statements,\u201d he added.<\/p>\n

Directives<\/p>\n

The municipality reportedly ignored a government directive limiting salary increments to 3%, and instead implemented a 5% increase agreed with the Namibia Public Workers Union.<\/p>\n

This decision inflated employee costs by N$72 million in 2023, and N$24 million in 2022.<\/p>\n

\u201cThe occurrence of this expenditure could not be confirmed by auditors, given that it exceeds ministerial approval,\u201d Kandjeke stated, calling into question the municipality\u2019s compliance with regulatory salary limits.<\/p>\n

This statement may, however, be contradictory to the city\u2019s CEO Moses Matyayi\u2019s views, who earlier this year said there were no salary increases granted in the last four years since 2020.<\/p>\n

At the time, he was responding to Kandjeke\u2019s conclusion of a qualified audit opinion for the 2020\/2021 financial audit report.<\/p>\n

\u201cWe are actively crafting a financial recovery plan aimed at securing long-term financial sustainability. Our focus is not only on developing a robust strategy, but also on ensuring its effective execution to achieve our goals in line with the strategic plan 2022-2027,\u201d he stated.<\/p>\n

Manipulation<\/p>\n

Another area of concern involves potential data manipulation within the SOLAR accounting system.<\/p>\n

A preliminary investigation by the ICT and internal audit departments revealed possible irregularities. But as the report states, this was a high-level assessment, not a forensic investigation.<\/p>\n

\u201cThe full extent and impact of this potential data manipulation on the financial statements for 2023 cannot be determined at this stage,\u201d Kandjeke warned.<\/p>\n

The municipality\u2019s reliance on non-expert assessments leaves lingering questions about the accuracy of the figures reported.<\/p>\n

Additionally, the auditors were also unable to confirm the completeness of the municipality\u2019s land reconciliation, which details land sizes and use categories under its jurisdiction.<\/p>\n

\u201cThe accuracy and completeness of land assets recognised in the financial statements remain uncertain due to insufficient reconciliation,\u201d the AG reported.<\/p>\n

Ongoing challenges<\/p>\n

This is not the first time Kandjeke has reported concerns about the city\u2019s financial health.<\/p>\n

Even in the 2020\/2021 financial audit report tabled in parliament mid-this year, he indicated that the city does not have a plan how it will turn around its commercial insolvency and the deficit-making position in the foreseeable future.<\/p>\n

During those years, the municipality\u2019s liabilities of N$1.9 billion exceeded its assets of N$942.56 million in 2021.<\/p>\n

It also incurred a deficit of N$482.25 million in 2020.<\/p>\n

In 2022, Independent Patriots for Change (IPC) Windhoek councillor Ju\u0308rgen Hecht painted a bleak picture of the municipality, showing a city in financial distress, with barely any room to manoeuvre.<\/p>\n

\u201cNo commercial enterprise would have survived such amounts of losses, and would have been declared bankrupt within two to three years… This means the City of Windhoek cannot settle its current expenses and liabilities by means of its cash resources and outstanding debtors,\u201d he emphasised at the time.<\/p>\n

For More News And Analysis About Namibia<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Namibia. Auditor general Junias Kandjeke has uncovered substantial financial and operational challenges facing the City of Windhoek, highlighting issues which may threaten its financial sustainability. Perhaps the most critical finding is the municipality\u2019s apparent state of commercial insolvency, as their current liabilities have consistently outpaced their assets. As of 30 June 2023, the […]<\/p>\n","protected":false},"author":84,"featured_media":80209,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,12],"tags":[234,236,233],"class_list":["post-80210","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-policy","tag-africa-press","tag-africa-press-namibia","tag-namibia"],"yoast_head":"\nCity financially at sixes and sevens \u2013 Kandjeke - Namibia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/namibia\/all-news\/city-financially-at-sixes-and-sevens-kandjeke\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"City financially at sixes and sevens \u2013 Kandjeke\" \/>\n<meta property=\"og:description\" content=\"Africa-Press – Namibia. Auditor general Junias Kandjeke has uncovered substantial financial and operational challenges facing the City of Windhoek, highlighting issues which may threaten its financial sustainability. Perhaps the most critical finding is the municipality\u2019s apparent state of commercial insolvency, as their current liabilities have consistently outpaced their assets. 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