AG seeks answers on defence spending
…questions ministry paying salaries at August 26
Auditor General (AG) Junias Kandjeke has questioned a defence ministry expense of over N$3.8 million incurred for salaries paid on behalf of August 26 Holdings during the financial year ended 31 March 2020.
In the AG’s official Ministry of Defence report for the period under review, he noted that no treasury approval was provided in this instance as required by the State Finance Act.
When the AG’s office queried the relationship between the defence ministry and August 26 Holding, the ministry’s accounting officer responded, “the companies listed by the auditors do not receive any funding or are not subsidised from the state revenue fund”.
However, the AG stated that his office was not provided with satisfactory answers as to why the ministry has to pay salary expenses on behalf of August 26 Holding, while it has indicated that there is no relationship with the said company.
August 26 Holding is an incorporated company, which was established on 14 August 1998, and it is 100% owned by the Ministry of Defence and Veteran Affairs. The ministry is the shareholder on behalf of the government.
Furthermore, the AG noted that no treasury approval was provided and according to the State Finance Act, no payment shall be made as charged to the state revenue fund without the authorisation of the treasury.
“The accounting officer should explain why the expenses were incurred despite the ministry’s insistence that there are no relations
between the ministry and the said company. Furthermore, the accounting officer should ensure that treasury approval is obtained as required by Section I7 (b) of the State Finance Act, 1991,” he advised.
The AG’s report tabled in parliament this week, also stated there was an unexplained difference of N$459 334.52 in the debit balance list.
In his explanation, the ministry’s accounting officer reported that the debit balance list had an outstanding amount of N$7 229 as of 31 March 2020. However, the subsistence and travel advance suspense account is not in agreement with the debit balance list which had a closing balance of N$466 563.52.
The AG therefore recommended that the officer in charge explain the difference and should indicate what measures will be put in place to avoid differences in balances.
Also, the ministry encountered unauthorised expenditure which occurred during the period under review, however, the accounting officer reported a nil statement in this regard.
Kandjeke noted that the total vote of the ministry was overspent with an amount of N$70 117 089 (1.19%) which involved all nine main divisions of the ministry.
“Although treasury approval was obtained to utilise certain expected savings for the defrayal of expenditure through virements during the year, 14 main divisions were exceeded with a total amount of N$87 023 824.66 which is unauthorised in the Act. Despite the matter being raised in previous audit reports, no improvement is evident,” the AG stated. -mndjavera@nepc.com.na