THE Keetmanshoop Town Council has recorded a net profit of N$9,2 million for the financial year ended June 2011, but Auditor General Junias Kandjeke found that the accounting and internal controls of the authority were inadequate.
Total income stood at about N$40,5 million, while the expenditure for the book year amounted to N$31,6 million.
Kandjeke said proper segregation of duties at the municipality is not feasible due to the small number of staff employed.
"While increased management involvement reduces risks, the risk arises that management and council override existing controls, a potentially dangerous practice, which the council should vigilantly guard against," said Kandjeke.
Some weaknesses were also found in the management of funds for the Build Together Fund which the council is administering on behalf of the Ministry of Regional and Local Government, Housing and Rural Development.
The auditors discovered that no proper control was exercised in terms of the monthly reconciliation of the fund and numerous supporting documents for the disbursement of the money could not be found at the time of the audit.
"A material difference of N$2 205 217 was detected during the audit procedures which is due to funds received for the informal settlement upgrading sub-programmes which were deposited into the council's current account and is disclosed as sale of erven."
The outstanding debt for the council for the year under review amounted to more than N$26,8 million, while there was also a material difference of more than N$6,7 million between the annual financial statements and the Receiver of Revenue statement of account as far as value-added tax is concerned.
According to Kandjeke, the council made a net profit of N$2,3 million on the sale of water, while another N$6,1 million profit was made on supporting services such as commonage and pound, sewerage and health and sanitation.
However, in the case of the caravan park at the town N$164 426 was spent, while only N$31 449 were recorded as income.
No irregularities were revealed by the audit for the year under review.