Katima blames SA softwarefor late annual reports

Katima Mulilo Town Council chief executive Raphael Liswaniso says the South African (SA) software the council is using is to blame for delivering its annual reports late.
He says this system is managed in SA, meaning, challenges often take up to three months to resolve.

Liswaniso says the financial service is not web-based and does not produce reports immediately.

He was answering questions from the parliamentary standing committee on public accounts and economy during a public hearing yesterday.

The committee, in conjunction with the Office of the Auditor General, was hosting the public hearing with the Katima Mulilo Town Council management to investigate its adverse audit opinion for 2019.

“However, we are in the process of changing to a new financial system that will be in effect by the end of this financial year. This system is automated – even reconciliation is faster, and it also provides financial statements,” he says.

Liswaniso says the council has improved internal controls and proper maintenance of accounting records, as well as capacitated staff members to ensure compliance with the accounting reporting framework.

“We are also promptly addressing audit findings to prevent future reports containing unverifiable information,” he says.

He says the auditors previously found it difficult to verify the existence of assets due to the council’s assets not being labelled.

“However, to rectify this, we have acquired tags to ensure all assets are tagged for easy verification . . ,” he says.

Liswaniso says going forward, the council would follow the audit recommendation in treating debt impairment provisions and trade debtors, and it has done so during the 2020/21 financial year.

“In respect to the Build Together programme, the auditors were unable to verify the balance of
N$2 891 241, representing the true book value of the loans, due to the absence of a computerised accounting system.

“However, we have committed to scrutinising all the payments and contracts of beneficiaries. This will ensure an accurate reflection of amounts in future financial statements that can be verified during the audit engagement,” he says.

Liswaniso says the council is also addressing the backlog in reconciling Pay As You Earn (PAYE) taxes and is currently submitting monthly PAYE returns.

“Regarding Value Added Tax (VAT) reconciliation, some returns are still outstanding, and the council aims to complete all outstanding returns up until August 2023 to ensure compliance.

“The delay in VAT reconciliation was caused by the computer system crash, where no back-up was done, forcing a restart of the process.

“We have a substantial outstanding balance of N$ 82 655 770.42, including penalties of
N$ 36 209 142.37 and interest of N$ 23 375 366.74, with the principal total debt amounting to
N$23 071 261.31.

“We have since entered into a memorandum of understanding with the Namibia Revenue Agency and have rectified that situation,” he says.

The committee, chaired by Peter Kazongominja, also questioned the council management on why there were no supporting documents for the sale of ervens totalling up to almost N$3 million, and no share certificates or other supporting documents of their shares in Northern Regional Electricity Distributor, amounting to N$3 million at the time of the audit.