…As Defence Ministry overspends N$ 185.2 million
• ACC has no backup plan
• Karibib can’t account for N$ 17.31 million
• Mines and Energy lambasted for underspending N$10 million
By Staff Reporter
Under the tutelage of Auditor General Junias Kandjeke, reports by the Office of the Auditor General (AG) have for years shown a trend where accountability appears to be nonexistent at the majority of government offices, ministries and agencies (OMAs).
Another precedent that has been set is that due to the Auditor General’s inability to pursue those institutions that recklessly spend taxpayers’ money, is a lack of implementation of recommendations made by Kandjeke to improve accounting processes at various institutions. This is a situation which leaves much to be desired.
At best, these recommendations continue pilling up as most government institutions, particularly local authorities are understaffed or do not have the requisite expertise to handle their accounting.
As it stands, there appears to be no immediate remedy in sight to assure taxpayers that each of their pennies will be accounted for and be put to good use, while Treasury will continue bankrolling incompetent institutions in an attempt to fill up what appears to be an endless pit.
This week, The Patriot reviewed several audit reports by Kandjeke into the books of several institutions and their performance thereof. The period of review is the 2017/18 financial year.
Supremely, the 2017/18 audit report of the Ministry of Defence (MoD) drew a particular interest due to a plethora of irregularities reported there. For far too long, the MoD has enjoyed a large chunk of national budget, which has drawn criticism from experts and opposition parties alike.Although the ministry has come to its own defence, justifying its ever-bloating budget, it has used national security as a guise to veer away the scrutiny on how it spends the billions it gets.
Going through the report, it is clear that unauthorized expenditure has become a norm at the ministry.
During the 2014/15 financial year, the ministry spent N$ 44 million without Treasury approval which is in direct conflict with the State Finance Act of 1991.
In the next financial year, N$ 77 million was spent without the approval of Treasury.
As if this was not enough, N$ 371.2 million was spent without permission of Treasury during the 2016/17 fiscal period.
“It has been noted that unauthorized expenditure has been recurring in the Ministry of Defence for three consecutive years,” Kandjeke acknowledged in the report. To cap it off, during the 2016/17 financial year, the Ministry overspent its total budget by N$ 185.2 million.
“Although Treasury approval was obtained to utilise certain expected saving for the defrayal of expenditure through virements during the year, four (04) subdivisions were exceeded with a total amount of N$ 88 943 834.95 of which three (03) were operational subdivision and one (01) [was a] development subdivision which is unauthorised in terms of Section 6 (a)(iii) of the State Finance Act,” the report further reveals.
More so, in the 2017/18 financial year, the ministry spent N$ 3.9 billion on the remuneration of its personnel. Meanwhile, during the 2016/2017 financial year, it spent N$ 37 million on furniture, office equipment, vehicles, operational equipment, machinery and plant, the report further shows.
In addition to this, the spent N$177.1 million on renovations, construction and improvement of its infrastructure.
The Ministry, through its executive director Peter Hafeni Vilho earlier this year indicated that they “sick and tired” of perennial complaints about perceived exorbitant budget allocations to the ministry.
Vilho said if the expenditure on the country’s defence is a waste of resources, the MoD in its entirety should be done away with so that Namibians can suffer the consequences of its absence.
“I am sick and tired of listening to people insulting our intelligence. I can assure you today that if all European countries do away with their armies, that will be the day that we will also do away with the Namibian Defence Force,” he charged at the time.
The Ministry of Defence received N$5.9 billion from the state treasury during the 2019/20 financial year, according to the national budget that finance minister Calle Schlettwein tabled in parliament in March, making it the fourth-highest recipient, behind basic education (N$13.8 billion), finance (N$10.8 billion) and health (N$6.9 billion).
The Ministry of Defence is not alone in the list of entities failing at accounting as the Karibib Municipality is not an exception.
During the same period (2017/18 financial year), the Karibib Town Council (Karibib Municipality) received a disclaimer auditor opinion from Kandjeke.
This type of opinion is given by auditors when they are unable to determine the financial position of a firm because there is insufficient data to enable them to form an opinion. “I believe that the audit evidence I have obtained is insufficient and inappropriate to provide a basis for my opinion,” Kandjeke is quoted in the report.
He premised this on six discrepancies in the town council’s books.
First, the municipality did submit any supporting documents to verify sundry creditors amounting to N$ 1.3 million while its bank balance was understated by N$ 9.4 million. The dossier further reveals that Karibib’s debt provision was understated by N$ 5.1 million while its expenditure was overstated by N$ 391 785 million.
Meanwhile, expenditure amounting to N$ 290 725 was captured in the wrong financial period. The council did also not avail documents to back up how it generated N$ 825 701.
‘No energy to spend’
Over the years, Kandjeke has appealed to government entities not to request from Treasury more money than that which they can possibly spend during a financial year. This, according to Kandjeke is because when institutions underspend funds allocated to them, it hampers service delivery, especially at institutions which were underfunded by government during that period. ‘
In this case, the Ministry of Mines and Energy underspent its budgetary allocation by N$ 10 million during the 2017/19 financial year, money which could have been used to address other pressing national needs.
“It is recommended that the Accounting Officer [the Executive Director] should put measures in place to avoid under-expenditure and should ensure that all planned programs are implemented,” Kandjeke pleads to the ministry in the report.
In their draft response “the Accounting Officer indicated that he agrees with the findings and it was caused by the slow implementation of the Procurement Act”.
‘No plan B’
Considered a toothless dog in the public eye for failing to seriously fight corruption by only targeting low profile cases [small fish] while politicians [big fish] who consistently and unashamedly loot dry the state coffers go unscathed, the Anti-Corruption Commission (ACC) has its own shortcomings on the accounting front. During the period under the microscope, Kandjeke’s men noted that the ACC is yet to come up with an approved disaster recovery plan to provide information and guidance in the event of a disaster.
“Disaster recovery plan is an integral part of the overall risk management of the Commission. Since none of the risks can be eliminated, the management should implement a disaster recovery plan to prepare potentially disruptive events,” Kandjeke stated.
The importance of a disaster recovery plan for an institution like the ACC cannot be overemphasised, Kandjeke explained.
The process is extremely important because it provides detailed strategies on how the Commission will continue to operate – uninterruptedly without losing important data – after severe disasters. “In the event of a disaster, the continued operations of the Commission depend on the ability to replicate its IT systems and data. The disaster recovery plan stipulates how the Commission will prepare for a disaster, what the Commission’s response will be and what steps it will take to ensure that operations can be restored,” he said.
Kandjeke continued: “It is recommended that the Accounting Officer (Paulus Noa) should develop and implement an IT disaster recovery plan.” This plea, at least according to the report fell on deaf ears. “No comment was provided by the Accounting Officer,” the report notes.