Monday 12 April 2021
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NUNW’s money troubles

•     No database of sub-unions
•    Overstatement of cash and cash equivalents

•    Outdated asset register
•    Labour Investment Holdings not monitored

The fanatical records of the country’s largest trade union the National Union of Namibia Workers (NUNW) are a sorry mess – this is according to an internal audit which has been leaked to The Patriot.

The poor state of accounting records has, according to the union’s auditors, opened NUNW to fraud and abuse of union assets.

The report, compiled by Saunderson & Co for the year ended 31 December 2016, points to an environment where financial controls have collapsed and lists some shocking deficiencies and questionable operational procedures.
Among the several shocking findings is the fact that at 31 December 2016 only two of the 12 NUNW employees had signed employment contracts, despite the Labor Act prescribing that all employees must sign employment contracts.
Also, employees’ tax returns for January 2016 to March 2016, September and December 2016 were all submitted late while amounts totaling N$37 431.10 were not subject to Pay As You Earn( PAYE) because it was paid to the respective employees without first deducting the PAYE. The money was used to cater for staff overtime, salary advance a bonus for one of the employees. This, the auditors say, exposes the employees to penalties and interest from the Receiver of Revenue.
The auditors therefore urged the NUNW management to put controls in place to ensure that all remuneration paid to current and ex-employees is net of PAYE.
For a union that is struggling to pay its bills, documents indicate that NUNW had no problem spending N$18 697 on staff overtime for the 2016 May Day celebrations that took place in Oshakati.
While there is money for overtime, there is subsequently no money to honor international obligations.
The report indicates that NUNW owes Southern African Trade Union Co-ordination Council(SATUCC), Organization of African Trade Union Unity(OATUU) and International Confederation of Free Trade Unions –Africa (ICFTU-AFRO) a combined N$590 000 in affiliation fees.
The debts, according to the auditors,  creates a serious reputational risk hence reducing the credibility of NUNW and subsequently all unions in the country. NUNW also runs the risk of having its membership with the international unions being terminated.
“There is also a risk of international exposure to foreign currency fluctuations as the amounts owed are denoted in foreign currencies,” said the auditors.
The auditors also revealed that NUNW’s business arm, Labour Investment Holdings is not being monitored.
LIH is involved in multimillion dollar transactions. Last year a company it partly owns, Gazania 128 which is chaired by David Namalenga, donated N$1 million to NUNW and other organisations for social development in education and infrastructure. But despite such lucrative investment, LIH is left to operate without oversight.
“Based on enquiries and requests made for financial records of Labour Investment Holdings(Pty) Ltd, there is no evidence of monitoring of the performance of the investment in LIH by the Union,” said the auditors.
The auditors warned that although the risk of misstatement of the investment is low as it is only carried at N$100 being the cost of the designated accounting policy, there is a higher business risk that things may not happen according to the intention of the investor(Union) if no monitoring is performed.

Asset register
The auditors also told of the fixed asset register which is not constantly updated that has since led to a variance between the fixed asset register and the general ledger. Assets procured in 2016 were not in the register.
The auditors said they could not estimate the value of the individual assets because the breakdown for opening balances did not have values allocated to the respective assets.

The auditors also brought to the open the fact that affiliates, apart from the Mineworkers Union of Namibia(MUN), were not paying their affiliation fees.
“No database was received from the sub-unions which clearly indicates the money collected hence the completeness of affiliation fees received cannot be determined,” said the auditors who added that they could not trace receipts to payment and vouchers totaling N$207 567 apparently paid by Namibia Public Workers Union(Napwu) last year on 30 March, 2 August and 14 December. There are reference numbers but the payment vouchers could not be produced as evidence.
The leaked report flies in the face of recent assurances by NUNW that the financials of the union is in order and that the workers’ monthly contributions are well cared for.
The 46-year union has a total membership of almost 80 000 and it has a potential to rake in over a million a month in subscription fees.
The union’s leadership is currently embroiled in a power battle, that saw NUNW president Ismael Kasuto being suspended.
Kasuto however claims that he is still president of the union because the meeting that removed him was unconstitutional.
In a statement issued last month, Kasuto said he still remains NUNW president as elected by the national congress that was held two years ago, 01 May 2015.
Kasuto was removed as president of the union with immediate effect as per resolution taken at a special central executive committee meeting of the NUNW last month.
‘I am happy to have served the workers and should they (workers) feel that I should vacate the noble office, I would do so with dignity as I need to respect workers democracy, emphasised Kasuto.
But he pointed out that the call must come from a credible and constitutional structure and not a faction driven coup aimed at causing structural disruption.
However, a statement issued by the NUNW special meeting says Kasuto was suspended for alleged divisive tendencies characterised by tribal preferences which led to a lack of unity among industrial unions affiliated to the NUNW.
The statement also accuses Kasuto of alleged negligence through exposing the union to a lawsuit by one of its affiliates, the Mine Workers Union (MUN).
He was accused of being absent from court, although he knew that the federation was under attack.
However, Kasuto said the meeting that resolved to remove him as NUNW president was unconstitutional since the initial special central executive committee meeting was scheduled for 16 September to allow enough time for compilation of authentic financial records.
He accused the instigators of altering his invitation to the NUNW paid-up affiliates for the September meeting.

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