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Kandjeke: Tsumeb’s books in shambles

2023-09-27  Edward Mumbuu

Kandjeke: Tsumeb’s books in shambles

From lack of a fixed asset register to incorrect balance brought or unexplained variance amounting to N$1.4 million and N$1.8 million, Tsumeb municipality’s books are in a shambolic state. 

This is found in auditor general (AG) Junias Kandjeke’s recent audit report into the municipality’s financial statements for 2021/22 period, tabled in Parliament for scrutiny this week. 

Kandjeke gave the municipality an adverse audit opinion, the worst there is. 

In accounting, an adverse opinion is given when an entity’s financial statements are misrepresented, misstated and do not accurately reflect its financial performance and health.

“The financial statements do not present fairly, in all material respects, the financial position of Municipality of Tsumeb and its financial performance and cash flow for the financial years ended,” Kandjeke said. 

Supremely, Kandjeke’s officials noted that the Tsumeb municipality had no comparison of approved budget and actual amounts during the year under review. 

“It is recommended that the council ensure that comparison of budget be disclosed in the financial statement as per International Public Sector Accounting Standards (IPSAS),” Kandjeke suggested. 

Worse, the council does not have a “proper fixed asset register for the financial years under review. Therefore, the auditors could not carry out audit tests to confirm the assertion value, accuracy and existence of property, plant and equipment.” 

“It is recommended that the council ensures that [a] proper fixed asset register is in place,” the AG furthermore recommended. 

What is more, the auditors noted that the closing balance of 2021 amounting to N$78.5 million was incorrectly brought forward as N$83.8. This resulted in a difference of N$5.3 million. 




“It is recommended that the council ensures that opening balances are correctly brought forward and disclosed in the financial statements,” the public’s top auditor advised. 

The auditors furthermore detected an unexplained difference of N$1.4 million (2022) and N$1.8 million in 2021 between the municipality’s salary control account and the VIP payroll.  

It was recommended to council that the VIP payroll and salary control account be reconciled to avoid misstatements. 

Strangely, the auditors also discovered that external loans exceeding 12 months were classified as current liabilities instead of long-term liabilities, during the period under the microscope. 

“It is recommended that the council ensures that external loans exceeding 12 months are classified and disclosed correctly,” Kandjeke added. 

The auditors could also not obtain sufficient appropriate audit evidence to verify direct adjustments to net assets amounting to N$1.7 million last year and N$2 million in 2021. 


Delving deeper into Kandjeke’s report, the municipality’s current assets - those that can be quickly converted into cash – stood at N$47.1 million, N$53.7 million and N$45.8 million in 2020, 2021 and 2022 in that order. 

At present, the municipality’s non-current assets – property, plant, equipment and investment – are valued at N$186 million. Its current liabilities stand at N$58.4 million while the non-current liabilities are N$4 million. 

In reserves, which includes statutory funds and accumulated surplus, the municipality had N$123.8 million. 

In 2022, the municipality paid N$45.7 million in employees’ salaries, N$562 051 on councillors remuneration, N$6.3 million on repairs and maintenance, N$1.1 million on contracted services and N$14.1 million on debt impairment. 

Last year, Tsumeb mayor Mathews Hangula collected N$88 910 in allowances, while his deputy raked in N$81 289 during the same period. 

The management committee chairperson pocketed N$76 856 while the remaining councillors earned a combined N$314 995. 

General expenses for 2022 stood at N$25 million. All in all, the municipality’s total expenses for the same year was N$100 million.

(Photo: Tsumeb)


2023-09-27  Edward Mumbuu

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