The Mineworkers Union of Namibia (MUN) is under scrutiny after an audit revealed unaccounted expenditure of N$18 million between 2015 and 2021.
Audited financial reports spanning 2015 to 2021 disclosed a series of challenges related to financial transactions, membership fees and expenses.
The audit report, seen by The Namibian, also highlights recurring issues surrounding revenue accuracy, the lack of proper documentation for expenditure and challenges in assessing the value of investments, which stem from the tenure of former MUN president Raimo Hausiku, who died in 2016.
Hausiku was succeeded by Desley Somseb in an acting capacity, but the latter was later removed following allegations of poor decision-making and divisions within the union.
Allen Kalumbu took over the leadership of the MUN until he was replaced by Ismael Kasuto earlier this year.
When approached for comment, Kalumbu declined to respond.
“I’m no longer the president. Whatever challenges we were faced with are now for the current leadership.”
Somseb said during his two years in office, the union received clean audits.
“The right person is the former general secretary and treasurer [Ebben Zarondo], because he is the head of the administration, which includes the finances,” he said.
Zarondo referred queries to his deputy, Paul Smokey, who said he never played a hands-on role in terms of financial matters.
“The administration was purely done by the general secretary; the deputy would only come in when he is out of the office. It’s not always that I was at the forefront of the issues.”
The request for the financial audit was made by MUN members at the congress at Ongwediva in May.
The audit was conducted by Windhoek-based company Strategis Registered Accountants and Auditors, who highlighted the unreliability of the system and controls over membership fees which hindered audit procedures.
Thus, the auditors were unable to satisfy themselves as to the completeness and accuracy of the accounting records.
The auditors also found that membership fee controls were inadequate, hindering audit procedures. Income from donations could also not be fully controlled until entered into accounting records.
Additionally, internal control procedures for regional expenses were lacking, impacting bank reconciliation.
“Although those expenses were recorded, a significant portion of the supporting documentation could not be found,” note the auditors.
In the 2016 financial year, the fixed asset register resulted in a difference of N$312 44.00 on the accounting system.
In the 2017 financial year, the regional budget and expenditure documents were missing, affecting audit verification.
In addition, loan agreements with Nam-Prop Loan and Schedules amounting to N$350 498 were unavailable for audit verification.
For the 2018 financial year, expenses of N$8,1 million lacked supporting documents and value-added tax reconciliation discrepancies of N$405 922.32.
The auditors further found N$2,6 million in expenses in the 2019 financial year which lacked supporting documents.
Additionally, there was a value-added tax reconciliation discrepancy of N$266 577.28.
VAT returns were also submitted late.
In 2020, the auditors noted expenses of N$2,2 million lacked supporting documents.
During the year under review, a discrepancy of N$736 969.10 in affiliation fees in relation to the National Union of Namibian Workers was noted. In the same year, the value-added tax balance of N$3,4 million had verification challenges.
In 2021, there were no supporting documents for audit verification for expenses totalling N$4,1 million.
MUN could not find bank statements and schedules for investments worth N$2,2 million, which were unavailable for proper verification.
Value-added tax returns for N$4,4 million were not available for audit verification.
In the same year, supporting statements for trade payables provided by management did not agree with the ledger balances, resulting in a difference of N$2,3 million.
A difference of N$364 058.16 was noted between the supplier ledger and the trial balance.
Subsequent text selections amounting to N$499 669.04 did not have supporting documents or schedules.
Leave day listings were not provided by management to verify the balance per financial statements, amounting to N$1,1 million.
MUN is set to table the draft annual financial statements for the 2022 for approval at the next national executive committee meeting, scheduled for September.
To address the situation, Kasuto emphasised the urgency of working on regional reports.
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