AN audit conducted in March at the Rehoboth Rural Constituency office at Schlip revealed that N$152 000 had gone missing between April and December 2011.
The audit found shortages of money generated through water and electricity sales.
According to the audit report, office cleaner Lena Swartz admitted during an investigation that she had "borrowed" N$2 000 from the council for personal use.
The cleaner apparently informed the chief control clerk, Reinholdt Cloete, that she had taken the money and would pay it back.
The audit also found that the Swartz was selling water and electricity and received State funds without any proper appointment as sub-receiver and without the necessary capacity in terms if skills and knowledge to act as such.
It also found that the office lacked effective internal financial reporting.
"When the handling and take-over between the chief control officer and the concerned labourer takes place, there is no proof of receiving and handing over of such monies," the audit report stated.
A reliable source told The Namibian that no disciplinary action had been taken against Cloete and Swartz for alleged misappropriation of council money.
The source said that the council instead reported to the Public Service Commission (PSC) that Cloete, who is still on probation, should not be permanently appointed when his probation period ends.
The Hardap Regional Council's chief regional officer, Yvonne Boois, yesterday admitted that Cloete and Swartz remain in office, but declined to comment.
"Investigations are still on, unfortunately I cannot say anything at this moment," she said.
A corruption case relating to the missing money has been lodged with the Anti-Corruption Commission, ACC director Paulus Noa has confirmed.