Allexer Namundjembo
The Land Acquisition and Development Fund has come under scrutiny after the Auditor General, Junias Kandjeke, flagged a series of financial and operational shortcomings in its 2022 financial statements, revealing a concerning pattern of mismanagement.
According to a report tabled in Parliament last week, the fund failed to submit a complete set of financial statements as required by the International Public Sector Accounting Standards (IPSAS), including the omission of a statement of changes in net assets or equity.
Discrepancies were also identified between the fund’s financial records and tax information from the valuation roll, with gaps of N$29.5 million in 2023 and N$15.4 million in 2022.
The Auditor General linked the error to the fund’s continued use of a cash-basis accounting method to record land tax income instead of the accrual method recommended by IPSAS.
“The land tax, which the farmers have paid at the Namibia Revenue Agency (NAMRA), was N$6,081,355 in 2023 and N$5,071,384 in 2022. The fund only records the amounts received from NAMRA, which does not reflect the total receivables due for the financial year(s),” Kandjeke said.
This approach, he added, has led to a misstatement of trade receivables that should not have been recognised at all.
Further irregularities were found in the way salaries were paid.
In 2022, N$4.2 million in payroll expenses were paid directly from the fund’s account, contrary to financial rules, which state that such payments should come from the ministry’s vote.
Kandjeke recommended corrective action to ensure the fund’s payroll processes align with public finance guidelines.
Concerns were also raised over lease rental fees, where income totalling N$3.7 million over the two financial years could not be verified due to missing reconciliations.
Additionally, invoices worth over N$10 million were recorded in the wrong financial years, violating basic accounting standards.
The audit also revealed a failure to enforce land tax payments as required under the Agricultural (Commercial) Land Reform Act.
Despite legal provisions for penalties and court action against defaulting taxpayers, the Fund has not charged any penalties since 2002.
“The Fund should align its operations with its legislative mandate as outlined in Section 13 of the Agricultural (Commercial) Land Reform Amendment Act, 2000,” Kandjeke urged.
The absence of a strategic plan or annual plan for the reporting period further compounded the Fund’s performance issues.
Without these plans, Kandjeke pointed out, it would be difficult to evaluate the fund against key performance indicators and gauge its impact or success.
The Auditor General’s report has been submitted to Parliament for review, with calls expected for urgent institutional reforms.
