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Articles: Karasburg another town council floating on red ink

Posted by admin on Wednesday, July 21, 2004 - 02:19 AM

THE Karasburg Town Council owes Government more than a million dollars in repayments on loans it received before 1997.
The Auditor General's report for the year ended 2003 notes that the town's current economic position will not enable it to repay the arrears during this financial year. The Town Treasurer has written to Government to request it to write off the loans and the report urges the Ministry of Local and Regional Government and Housing to finalise an agreement in this respect. The report cites serious cash-flow problems at Karasburg as the reason for funds not being utilised for their intended purposes. During the 2002-03 financial year, N$900 000 had to be borrowed from other accounts to meet the council's operating costs. This figure reflects an increase of about N$60 000 compared to the previous year. But despite its dire cash-flow situation, the council had investments totalling N$1,8 million at the end of the last financial year. The Auditor General's report questions the viability of the town's annuity policy with Old Mutual as the guaranteed return at the end of the period under review is only N$1,3 million, considering that it had invested more than N$1,2 million at the time. The council's bank account stood at just more than N$200 000 at the time of the audit. The Auditor General's report recommends that with the exception of the housing fund, all other accounts be consolidated into one fund to enable the municipality to meet its obligations to creditors. Like numerous other councils across the country, Karasburg is no exception when it comes to difficulties in recovering the costs for services. As of June 2003, Karasburg residents and the town's suburbs of Lordsville and Westerkim were indebted to the Council to the tune of more than N$1,4 million. "The Council should consider taking serious steps to recover these outstanding amounts and consider introducing prepaid systems that will make it easier to control these services," advises Auditor General Junias Kandjeke. The Council suffered losses of 17,5 per cent on the sale of water during the last fiscal year - three per cent more than during the previous year. Residents are also guilty of failing to pay assessment rates and they owed Council nearly N$600 000 last year. In general, the report found the council's accounting and internal controls to be of a satisfactory standard, but it noted that it was at risk of management and council overriding the controls.

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