Windhoek-The position of internal auditor at the Electoral Commission of Namibia (ECN) has been vacant since September 2013.
There is thus a high risk of internal control weaknesses, which could lead to fraud going undetected.
This was revealed by the Auditor-General Junias Kandjeke in his audited financial report on the ECN for the year ended March 31, 2016. Kandjeke also found that the ECN has underspent in total budget for three consecutive financial years.
For the 2013/14 financial year, the ECN underspent by N$1.32 million compared to a whopping N$13.5 million underspent during the 2014/15 financial year, while for the 2015/16 financial year the commission underspent by N$9.94 million.
“These funds could have been utilized for other projects in the country,” he observed.
This could all be attributed to the fact that the organizational structure of the commission makes provision for an internal auditor, but which remains unfilled and could create loopholes in spending.
Kandjeke cautioned that treasury instruction DC 0202 stipulates that when drawing up draft estimates, accounting officers and their financial advisors shall take note of and guard against more funds than can reasonably be spent, being requested.
He recommended that the accounting officer put measures in place to avoid underspending of the budget and comply with treasury instruction DC 0202.
In his response to the draft report, the accounting officer indicated that he agreed with the findings and would put measures in place to conduct internal budget reviews and consultations.
The unauthorised expenditure mentioned is reported as such in terms of section 27 (6) (a) of the State Finance Act, 1991.
Kandjeke further revealed that one main division was exceeded by N$1.77 million which is unauthorised in terms of section 6 (a) (ii) of the Act; and although treasury approval was obtained to utilize expected savings for the payment of excess expenditure by way of virements during the year, one operational sub-division was exceeded by N$2.5 million.
“This excess is unauthorised in terms of section 6 (iii) of the Act. It is recommended that the accounting officer implement budgetary control measures to avoid unauthorised expenditure,” Kandjeke recommended.
He said the accounting officer reported 10 cases of outstanding subsistence advances of N$39,084, while the subsistence and travel advance suspense account indicates a balance of N$111, 205, and the debit balance list indicates an amount of N$105,896, leaving unexplained differences between the respective reports.
He says this might lead to the misstatement of financial statements.
Therefore, he recommended that the accounting officer perform reconciliation on a regular basis and comply with the requirements of circular D12/2016 of the auditor-general and treasury instruction BB0101. The circular states that an accounting officer who, under section 8 of the Act is charged with the general administration of a vote and state money under his control, should be responsible for the clearance of the accounting records accounts and other financial documents under his control.
Kandjeke further found that the commission does not have an audit committee – as a result, the effectiveness of internal controls and compliance with legislation is not being evaluated.
He said an effective audit committee would increase the integrity and efficiency of the commission, as well as the system of internal control and financial reporting.
“Under this structure, the internal audit team can serve as the audit committee’s ‘eyes and ears’ regarding the organisation’s ability to meet its financial and compliance responsibilities and ensure that the organisation adjusts practices and internal controls as needed,” he advised.
Further, he said, the ECN collected N$736,450 as deposits made by political parties to participate in the 2015 regional and local authority elections as well as for the candidates who participated in the by-elections.