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City can comply with credit obligations

2021-11-25  Maihapa Ndjavera

City can comply with credit obligations
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City of Windhoek acting CEO JenniferComalie assured residents that the city is in a position to honour all its obligations with creditors.

“The city has quite a strong balance-sheet, and I can assure everyone that we are up to date with our biggest creditors, which are the Namibia Power Corporation (NamPower) and the Namibia Water Corporation (NamWater), so residents should not worry about interruptions in service delivery. We just have to continue managing our cash flow,” Comalie said at yesterday’s press briefing.

This followed after auditor general (AG) Junias Kandjeke warned that the city might face trouble in their ability to pay creditors in the near future.

The AG gave the municipality a disclaimer of opinion for the 2019/2020 financial report tabled in parliament last week. 

According to him, the municipality’s current liabilities of N$2.3 billion exceed its current assets by N$1.2 billion.

Comalie said the city is aware of the commercial risk in its books, and is at the stage of managing it. 

According to Samuel Mutonga, the executive on financial reporting in the city, what triggered the liability figures is leave provision that stands at N$354 million, and from history, they only pay N$13 million annually, leaving N$341 million payable beyond 12 months. The second component is N$712 million, which comprises loans due to government, and council is busy negotiating for a debt/land swap. 

These loans, according to Comalie, were for infrastructural development in the city.

Furthermore, Kandjeke had said there have been no information audits performed by the city for the past five years on E-Venus for prepaid services, the CRS system for payroll and the TCS system for fines. 

Comalie said in her presentations on addressing the findings in that report that the city has thus far done a risk-based audit in that respect, and is busy with an ERP system upgrade for which an external auditor has been appointed to provide assurance on the project.

“Management is evaluating the outcome of the risk-based audit, and will then devise the scope of the full information communication technology (ICT) audit to be done in the 2021/2022 financial year,” she continued.

Comalie said there is an ongoing effort to reconcile the Build Together funds and related assets.

For the coming three years, the focus is to upgrade the accounting module and complete the system audit as well as strengthen auditor and auditee communication with the AGs office to avoid a repeat of 2019 and 2020. 

–mndjavera@nepc.com.na


2021-11-25  Maihapa Ndjavera

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