Staff Writer
Auditor-General Junias Kandjeke has issued a qualified audit opinion on the government’s financial statements for the year ended 31 March 2025, citing an unreconciled N$792.4 million variance in State Revenue Fund records, unauthorised spending by the ministry of defence and weaknesses in revenue accounting.
The audit also found that the government failed to allocate hundreds of millions of dollars in collected tax revenue to the correct revenue categories, while 14 offices, ministries and agencies underspent their budgets by a combined N$1.23 billion.
According to the report, the State Revenue Fund’s Summary of Control Suspense Accounts reflected a closing balance of negative N$5.70 billion, compared with negative N$6.50 billion calculated from the state execution ledger.
The difference amounted to N$792.4 million, raising concerns about the accuracy and reconciliation of government accounts.
The report further identified credit balances of N$29.3 million in the Customs Receipt Suspense account and N$599.1 million in the Internal Revenue Department Receipt Suspense account.
These balances indicated that revenue had been received but had not been properly allocated to the relevant revenue categories, affecting the accuracy of government revenue reporting.
The Auditor-General also highlighted weaknesses in oversight between the ministry of finance and Public Enterprises and the Namibia Revenue Agency (NamRA).
According to the report, NamRA submitted revenue statements directly to the Auditor-General’s office without formal review or approval by the ministry’s accounting officer.
The report also noted that the government had not implemented a recommendation made five years ago to replace its cash-based accounting system with an accrual-based framework.
Namibia continues to reject the implementation of International Public Sector Accounting Standards (IPSAS), which would provide a framework for recording government assets and liabilities alongside revenue and expenditure.
On expenditure, the ministry of defence spent N$7.14 billion, exceeding its authorised budget by N$252.9 million, or 3.67%.
The report states that the overspending contravened Section 6 of the State Finance Act.
In contrast, 14 offices, ministries and agencies failed to spend their full allocations, leaving N$1.23 billion unspent.
The ministry of health and social services recorded the largest underspending at N$352.8 million, followed by the ministry of transport at N$143.8 million.
The ministry of education, innovation, youth, sports, arts and culture left N$108 million unspent, while the ministry of works and transport recorded an underspending of N$103.2 million.
The audit also highlighted an increase in government borrowing and debt-servicing costs during the 2024/2025 financial year.
Accumulated government borrowings reached N$75 billion, up 13.82% from approximately N$65.89 billion in the previous financial year.
The government spent N$13.08 billion on interest payments during the period.
Total state expenditure increased by 13.9% to N$163.27 billion, while total revenue collections amounted to N$164.06 billion.
