he Outapi Town Council accumulated an astounding N$24 million in debt for the 2018 financial year. This was revealed by the town's chief executive officer, Ananias Nashilongo, on Tuesday morning. Now, in a recent report the Auditor General (AG), Junias Kandjeke, has recommended that a debt collector be roped in to collect the outstanding millions.
According to Nashilongo most of the outstanding money is owed by local business personalities operating within Outapi's central business district.
The Auditor General's report on the accounts of the Outapi Town Council for the financial year ended June 2016, indeed recommended that town council hand over the defaulters to a debt collector, failure of which the AG suggested immediate legal action. The report, in possession of New Era, also recommended that the council implement strict measures to collect its outstanding debt.
The AG's report cautioned that the council will soon run into serious cash flow problems if strict debt collection measures are not introduced.
"An amount of N$6 million out of the total of trade debtors of N$13 million was selected for testing. Only 14 percent of the selected sample was confirmed as debt being collected. This is an extreme indication of poor recoverability," reads the report.
The report further reveals that there is no indication that senior management of the council approved any debt write-offs. It also said that the Outapi Town Council does not conduct a proper analysis of their debtors account and instead merely makes a provision for all accounts that are in arrears by more than 90 days.
The financial report further recommended that a senior official of the council should approve debtors' write-offs after obtaining necessary authorisation through council resolutions.
"Our financial system currently analyses the debt on a monthly basis. We will in future use it as our basis of the doubtful debt list," was the council management's comment on the report.