11

OFFICE OF THE OFFICE OF THE AUDITOR-GENERALAUDITOR-GENERAL

WORKING TOGETHER WORKING TOGETHER TOWARDS CLEAN AUDITTOWARDS CLEAN AUDIT

Goms Menette`Goms Menette`Deputy Auditor-GeneralDeputy Auditor-General

CONTENTCONTENT VisionVision

MissionMission

Strategic PlanStrategic Plan

Local Authorities Act Local Authorities Act

ExpectationsExpectations

Most common audit findingsMost common audit findings

Other audit findingsOther audit findings

Audit opinionAudit opinion

ConclusionConclusion22

33

VISIONVISION

The vision of the Office of the Auditor-The vision of the Office of the Auditor-General is to be an independent, General is to be an independent, professional supreme audit institution that professional supreme audit institution that produces quality and timely reports produces quality and timely reports resulting in the best use of public resulting in the best use of public resources. resources.

44

MISSIONMISSION

The SAI of Namibia is committed to The SAI of Namibia is committed to provide independent and credible audit provide independent and credible audit services for legally assigned public and services for legally assigned public and other institutions based on international other institutions based on international standards of auditing through quality standards of auditing through quality reporting to the National Assembly and reporting to the National Assembly and general public resulting in increased general public resulting in increased accountability and transparency.accountability and transparency.

55

STRATEGIC PLANSTRATEGIC PLAN

The Office of the Auditor-General performs The Office of the Auditor-General performs important constitutional functions as per article important constitutional functions as per article 127 (2) of the Namibian Constitution.127 (2) of the Namibian Constitution.

During the 2011 to 2012 financial year, the During the 2011 to 2012 financial year, the Office of the Auditor General intend to carry out Office of the Auditor General intend to carry out one hundred and twenty (120) asset inspections one hundred and twenty (120) asset inspections through out the country per annum, to ensure through out the country per annum, to ensure that states assets are properly accounted for. that states assets are properly accounted for. The office intends to finalize one hundred and The office intends to finalize one hundred and forty seven (147) financial audits of which 125 is forty seven (147) financial audits of which 125 is current and 22 on an anticipated backlog during current and 22 on an anticipated backlog during 2011/12.2011/12.

66

Local Authorities act 23 of 1992 Local Authorities act 23 of 1992

The Accounting Officer of the local council shall within The Accounting Officer of the local council shall within three months or such longer period as the Auditor-three months or such longer period as the Auditor-General may approve, after the end of a financial year of General may approve, after the end of a financial year of the local authority council make out financial statements the local authority council make out financial statements in respect of that financial year and submit such financial in respect of that financial year and submit such financial statements to the Auditor General. The financial statements to the Auditor General. The financial statement referred are:statement referred are:Balance sheet showing the assets and liabilities of the Balance sheet showing the assets and liabilities of the local authoritylocal authorityA statement of income and expenditure of the local A statement of income and expenditure of the local authorityauthorityAnd such other statement as may from time to time be And such other statement as may from time to time be required by the Auditor-General. (Cash Flow statement)required by the Auditor-General. (Cash Flow statement)

77

Local Authorities act 23 of 1992 Local Authorities act 23 of 1992 (cont)(cont)

Shall keep accounting records as are Shall keep accounting records as are necessary to reflect the transactions and necessary to reflect the transactions and financial state of affairs of the local financial state of affairs of the local authorityauthority

88

EXPECTATIONSEXPECTATIONS

The Auditor General requested Ministry of Finance in The Auditor General requested Ministry of Finance in terms of section 16 (1) (c) (v) of the state finance Act, terms of section 16 (1) (c) (v) of the state finance Act, 1991 (Act 31 of 1991), to write-off the amount of N$ 1 1991 (Act 31 of 1991), to write-off the amount of N$ 1 034 500.11 and 16% interest thereon owed by various 034 500.11 and 16% interest thereon owed by various local authorities. The reason for such a move was as local authorities. The reason for such a move was as follows:follows:To give institutions an opportunities to use the saving for To give institutions an opportunities to use the saving for the purpose of training of staff to enable them to compile the purpose of training of staff to enable them to compile relevant financial statements themselves.relevant financial statements themselves.To allow clean start for many institutions that were To allow clean start for many institutions that were struggling to settle the outstanding debts as was struggling to settle the outstanding debts as was indicated by the Government Attorneys. indicated by the Government Attorneys.

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MOST COMMON AUDIT MOST COMMON AUDIT FINDINGSFINDINGS

MUNICIPALITIES, TOWN COUNCILS, MUNICIPALITIES, TOWN COUNCILS, VILLAGE COUNCILS and REGIONAL VILLAGE COUNCILS and REGIONAL

COUNCILSCOUNCILS

1010

MOST COMMON FINDINGSMOST COMMON FINDINGS

Client availabilityClient availabilityFixed asset registerFixed asset register– Not properly maintainedNot properly maintained– Not updatedNot updated– Depreciation not calculatedDepreciation not calculated

Provisions (bad debts, leave, etc)Provisions (bad debts, leave, etc)– Not sufficientNot sufficient– Over-/under statedOver-/under stated

PAYE/VAT returnsPAYE/VAT returns– Not submitted;Not submitted;– Interest not chargedInterest not charged– Penalties not implementedPenalties not implemented

1111

MOST COMMON FINDINGSMOST COMMON FINDINGS

InvestmentsInvestments– Investment listings not maintainedInvestment listings not maintained– Bank statements not availableBank statements not available– Bank accounts not reflected on recordsBank accounts not reflected on records– Approval from Minister not available (The Regional Approval from Minister not available (The Regional

Councils Act, 1992 (section 33 (1) (d) and (3)Councils Act, 1992 (section 33 (1) (d) and (3)– Not in minutes of meetingsNot in minutes of meetings

Loans (for Build Together Fund)Loans (for Build Together Fund)– Listings not maintainedListings not maintained– Contracts not signedContracts not signed– No contractsNo contracts

1212

MOST COMMON FINDINGSMOST COMMON FINDINGS

DebtorsDebtors– Debtors listing not maintainedDebtors listing not maintained– Outstanding debts are not recoveredOutstanding debts are not recovered– Liabilities not reconciled Liabilities not reconciled

Cash & BankCash & Bank– Bank reconciliations not performedBank reconciliations not performed

InventoryInventory– Not disclosed in the financial statementsNot disclosed in the financial statements

1313

MOST COMMON FINDINGSMOST COMMON FINDINGS

Consumer depositsConsumer deposits– Consumers are in arrearsConsumers are in arrears– No consumer listingNo consumer listing– No supporting documentsNo supporting documents

External loansExternal loans– Loans are not paid back/in arrears;Loans are not paid back/in arrears;– No interest are charged;No interest are charged;– Loans lists are not keptLoans lists are not kept

1414

MOST COMMON FINDINGSMOST COMMON FINDINGS

Outstanding financial statementsOutstanding financial statementsAnalysis of financial statementsAnalysis of financial statements– Differences between trial balance and income Differences between trial balance and income

statementstatement– Differences between trial balance and balance sheetDifferences between trial balance and balance sheet– Opening balances not carried forward correctlyOpening balances not carried forward correctly– Unexplained adjustmentsUnexplained adjustments

5 % Assessments rates5 % Assessments rates– Not received by the Regional CouncilNot received by the Regional Council– Municipalities not sending confirmation letters Municipalities not sending confirmation letters

(indicating the period paid)(indicating the period paid)

1515

OTHER AUDIT FINDINGSOTHER AUDIT FINDINGS

Information Technology continues to be a challenge ;Information Technology continues to be a challenge ;

Local Authorities use different computer application Local Authorities use different computer application system for financial accounting purposes ; system for financial accounting purposes ;

Personnel at most Local Authority are not adequately Personnel at most Local Authority are not adequately trained to use this systems;trained to use this systems;

Make use of consultants to overcome a lack of technical Make use of consultants to overcome a lack of technical expertiseexpertise

Internal controls – poor/non existingInternal controls – poor/non existing

Lack of proper record keepingLack of proper record keeping

1616

AUDIT OPINIONAUDIT OPINION

QUALIFIED AUDIT OPINION – Indicates QUALIFIED AUDIT OPINION – Indicates concerns where the accounts, though fairly concerns where the accounts, though fairly presented, do not comply with generally presented, do not comply with generally accepted principles.accepted principles.UNQUALIFIEED AUDIT OPINION – Indicates a UNQUALIFIEED AUDIT OPINION – Indicates a clean set of account.clean set of account.DISCLAIMER AUDIT OPINION - Which is worst DISCLAIMER AUDIT OPINION - Which is worst of all, means the auditor has been unable to of all, means the auditor has been unable to express an opinion express an opinion ADVERSE AUDIT OPINION – Means the ADVERSE AUDIT OPINION – Means the accounts have been materially misstated. accounts have been materially misstated.

1717

AUDIT OPINIONAUDIT OPINION(CONCLUSION ON THE SELECTED CLIENTS)(CONCLUSION ON THE SELECTED CLIENTS)

MUNICIPALITIESMUNICIPALITIES– 4/16 received - Disclaimed opinion4/16 received - Disclaimed opinion– 10/16 received - Qualified audit opinion10/16 received - Qualified audit opinion– 2/16 received - Unqualified audit opinion 2/16 received - Unqualified audit opinion

(clean reports)(clean reports)

TOWN COUNCILSTOWN COUNCILS– 7/17 received - Qualified audit opinion7/17 received - Qualified audit opinion– 7/17 received - Disclaimed audit opinion7/17 received - Disclaimed audit opinion– 3/17 Backlog3/17 Backlog– No Clean reportNo Clean report

1818

AUDIT OPINIONAUDIT OPINION(CONCLUSION ON THE SELECTED CLIENTS) (CONCLUSION ON THE SELECTED CLIENTS)

(Cont)(Cont)

VILLAGE COUNCILSVILLAGE COUNCILS– 5/18 received - Disclaimed audit opinion5/18 received - Disclaimed audit opinion– 3/18 received - Qualified audit opinion3/18 received - Qualified audit opinion– 10/18 Backlog10/18 Backlog– No clean reportNo clean report

REGIONAL COUNCILS REGIONAL COUNCILS – 4/13 received – Qualified audit opinion4/13 received – Qualified audit opinion– 2/13 received - Disclaimed audit opinion2/13 received - Disclaimed audit opinion– 7/13 Backlog 7/13 Backlog – No clean reportNo clean report

1919

In ConclusionIn Conclusion

We have the responsibility to manage the We have the responsibility to manage the public purse with caution, respect and use public purse with caution, respect and use it effectively to ensure accountability.it effectively to ensure accountability.

Each Local Authority should develop its Each Local Authority should develop its own audit turn around plan.own audit turn around plan.

CLEAN AUDIT REPORTCLEAN AUDIT REPORT

2020

The endThe end

THANK YOU!THANK YOU!