The Swakopmund Municipality has failed its annual audit by auditor general Junias Kandjeke, who found that the municipality misstated the value of its properties by at least N$480 million.
The municipality has failed at least three of its past five audits. This year, Kandjeke had concerns that the municipality’s property register is inaccurate and that cash flows are misstated or distorted.
“In my opinion the financial statements do not fairly present the financial position of the municipality of Swakopmund for the financial year,” Kandjeke says in the report prepared by his office in July.
The audit looked at a sample of investment properties held by the municipality and found that 21 out of 30 had been transferred to private individuals.
“This misclassification arose primarily from the continued reliance on the 2020 valuation roll as the basis for the register, with no subsequent updates made to reflect property transfers and changes occurring between 2020 and 2025.
“Based on the sample results, this issue results in a projected misstatement of N$480 million on the investment property balance reported in the financial statements,” Kandjeke says.
In total, N$1.6 billion in land and property assets are based on outdated records according to the auditor’s report.
The municipality’s cash and cash flow statement also “do not entirely align” with the methods Swakopmund said it used for its financial report.
The report shows Swakopmund failed to accurately track how much actual money was going in and out of the municipality’s accounts.
“These errors indicate that the cash flow statement contains a combination of cash and non-cash amounts and does not accurately represent the municipality’s cash movements for the year,” Kandjeke says.
The Swakopmund Municipality says the issues flagged by the auditor general are likely due to the fact that it was implementing new accounting standards during the year.
Responding to a media report about its failed audit yesterday, municipality spokesperson Linda Mupupa said municipalities had three years to implement the International Public Sector Accounting Standards (Ipsas).
Swakopmund only completed the process in 2026.
“During this transition, financial information that was not recorded or presented in accordance with Ipsas requirements may have been reflected in the audit process as “missing”, “unallocated” or “incorrect”,” Mupupa said.
However, she said the municipality has not yet formally received the report from the auditor general’s office and will only be able to respond to the specific issues raised in the audit once it receives the report.
“The municipality wishes to clarify that reports alleging that the municipality of Swakopmund is either misrepresenting financial information or misusing public funds are incorrect and untrue. The municipality remains committed to transparent financial reporting, sound financial management and the responsible administration of public resources,” she said.
Responding to reports about the misstated values of property owned by the municipality, Mupupa said valuation rolls are only done every five years.
“The municipality confirms that the latest valuation roll was completed and concluded on 22 June 2026. This forms part of the municipality’s ongoing efforts to maintain accurate property records and strengthen the integrity of its financial information,” she said.
Both the valuation roll and the standards are, therefore, both up-to-date as of 30 June, according to Mupupa.
“The municipality is, therefore, confident that the progress made will be reflected in the audit outcomes for the next financial year, subject to the auditor general’s independent assessment,” she said.
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