1. 1 OFFICE OF THE AUDITOR-GENERAL WORKING TOGETHER TOWARDS CLEAN AUDIT Goms Menette` Deputy Auditor-General

2. CONTENT Vision VisionMission Strategic Plan Local Authorities Act Expectations Most common audit findings Other audit findings Audit opinion Conclusion 2

3. 3 VISION The vision of the Office of the Auditor- General is to be an independent, professional supreme audit institution that produces quality and timely reports resulting in the best use of public resources.

4. 4 MISSION The SAI of Namibia is committed to provide independent and credible audit services for legally assigned public and other institutions based on international standards of auditing through quality reporting to the National Assembly and general public resulting in increased accountability and transparency.

5. 5 STRATEGIC PLAN The Office of the Auditor-General performs important constitutional functions as per article 127 (2) of the Namibian Constitution. During the 2011 to 2012 financial year, the Office of the Auditor General intend to carry out one hundred and twenty (120) asset inspections through out the country per annum, to ensure that states assets are properly accounted for. The office intends to finalize one hundred and forty seven (147) financial audits of which 125 is current and 22 on an anticipated backlog during 2011/12.

6. 6 Local Authorities act 23 of 1992 The Accounting Officer of the local council shall within three months or such longer period as the Auditor- General may approve, after the end of a financial year of the local authority council make out financial statements in respect of that financial year and submit such financial statements to the Auditor General. The financial statement referred are: Balance sheet showing the assets and liabilities of the local authority A statement of income and expenditure of the local authority And such other statement as may from time to time be required by the Auditor-General. (Cash Flow statement)

7. 7 Local Authorities act 23 of 1992 (cont) Shall keep accounting records as are necessary to reflect the transactions and financial state of affairs of the local authority

8. 8 EXPECTATIONS The Auditor General requested Ministry of Finance in terms of section 16 (1) (c) (v) of the state finance Act, 1991 (Act 31 of 1991), to write-off the amount of N$ 1 034 500.11 and 16% interest thereon owed by various local authorities. The reason for such a move was as follows: To give institutions an opportunities to use the saving for the purpose of training of staff to enable them to compile relevant financial statements themselves. To allow clean start for many institutions that were struggling to settle the outstanding debts as was indicated by the Government Attorneys.

9. 9 MOST COMMON AUDIT FINDINGS MUNICIPALITIES, TOWN COUNCILS, VILLAGE COUNCILS and REGIONAL COUNCILS

10. 10 MOST COMMON FINDINGS Client availability Fixed asset register –Not properly maintained –Not updated –Depreciation not calculated Provisions (bad debts, leave, etc) –Not sufficient –Over-/under stated PAYE/VAT returns –Not submitted; –Interest not charged –Penalties not implemented

11. 11 MOST COMMON FINDINGS Investments –Investment listings not maintained –Bank statements not available –Bank accounts not reflected on records –Approval from Minister not available (The Regional Councils Act, 1992 (section 33 (1) (d) and (3) –Not in minutes of meetings Loans (for Build Together Fund) –Listings not maintained –Contracts not signed –No contracts

12. 12 MOST COMMON FINDINGS Debtors –Debtors listing not maintained –Outstanding debts are not recovered –Liabilities not reconciled Cash & Bank –Bank reconciliations not performed Inventory –Not disclosed in the financial statements

13. 13 MOST COMMON FINDINGS Consumer deposits –Consumers are in arrears –No consumer listing –No supporting documents External loans –Loans are not paid back/in arrears; –No interest are charged; –Loans lists are not kept

14. 14 MOST COMMON FINDINGS Outstanding financial statements Analysis of financial statements –Differences between trial balance and income statement –Differences between trial balance and balance sheet –Opening balances not carried forward correctly –Unexplained adjustments 5 % Assessments rates –Not received by the Regional Council –Municipalities not sending confirmation letters (indicating the period paid)

15. 15 OTHER AUDIT FINDINGS Information Technology continues to be a challenge ; Local Authorities use different computer application system for financial accounting purposes ; Personnel at most Local Authority are not adequately trained to use this systems; Make use of consultants to overcome a lack of technical expertise Internal controls – poor/non existing Lack of proper record keeping

16. 16 AUDIT OPINION QUALIFIED AUDIT OPINION – Indicates concerns where the accounts, though fairly presented, do not comply with generally accepted principles. UNQUALIFIEED AUDIT OPINION – Indicates a clean set of account. DISCLAIMER AUDIT OPINION - Which is worst of all, means the auditor has been unable to express an opinion ADVERSE AUDIT OPINION – Means the accounts have been materially misstated.

17. 17 AUDIT OPINION (CONCLUSION ON THE SELECTED CLIENTS) MUNICIPALITIES –4/16 received - Disclaimed opinion –10/16 received - Qualified audit opinion –2/16 received - Unqualified audit opinion (clean reports) TOWN COUNCILS –7/17 received - Qualified audit opinion –7/17 received - Disclaimed audit opinion –3/17 Backlog –No Clean report

18. 18 AUDIT OPINION (CONCLUSION ON THE SELECTED CLIENTS) (Cont) VILLAGE COUNCILS –5/18 received - Disclaimed audit opinion –3/18 received - Qualified audit opinion –10/18 Backlog –No clean report REGIONAL COUNCILS –4/13 received – Qualified audit opinion –2/13 received - Disclaimed audit opinion –7/13 Backlog –No clean report

19. 19 In Conclusion We have the responsibility to manage the public purse with caution, respect and use it effectively to ensure accountability. Each Local Authority should develop its own audit turn around plan. CLEAN AUDIT REPORT

20. 20 The end THANK YOU!