Swakopmund Municipality Audit: N$480M Property Misstatement Found

• Swakopmund Municipality failed its annual audit for at least the third time in five years, according to Auditor General Junias Kandjeke.
• The audit identified a N$480 million misstatement in property values, primarily due to reliance on an outdated 2020 valuation roll.
• A sample revealed 21 out of 30 investment properties had been transferred to private individuals but remained on municipal records.
• Inaccuracies were also found in the municipality's cash flow statements, which did not accurately represent cash movements.
• The municipality attributed the audit issues to its recent completion of International Public Sector Accounting Standards (IPSAS) implementation in 2026.

The significant N$480 million misstatement in property values, stemming from an outdated 2020 valuation roll and unrecorded transfers, underscores a critical lapse in the municipality's asset management.

The Swakopmund Municipality has once again received a critical assessment from Auditor General Junias Kandjeke, failing its annual audit for at least the third time in the past five years. Kandjeke's report, prepared in July, explicitly states that the financial statements do not fairly represent the municipality's financial position for the fiscal year, raising serious concerns about the accuracy of its financial records.

A primary concern highlighted in the audit is a substantial misstatement in the value of the municipality's properties, amounting to at least N$480 million. This significant discrepancy was uncovered through an examination of a sample of investment properties, where 21 out of 30 properties that had been transferred to private individuals were still erroneously listed on the municipality's books. The root cause of this Swakopmund Municipality audit property misstatement was identified as the continued reliance on an outdated 2020 valuation roll, failing to incorporate property transfers and changes that occurred between 2020 and 2025. The audit further revealed that a total of N$1.6 billion in land and property assets are based on these obsolete records.

Beyond property valuations, the audit also flagged inaccuracies in the municipality's cash and cash flow statements. Kandjeke noted that these statements did not align with the financial reporting methods Swakopmund claimed to employ. The report indicated that the municipality failed to accurately track the actual movement of funds, leading to a cash flow statement that contained a mix of both cash and non-cash amounts, thereby distorting the true representation of the municipality's cash movements for the year.

In response to the audit's findings, Swakopmund Municipality spokesperson Linda Mupupa attributed the identified issues primarily to the ongoing implementation of new accounting standards. Mupupa explained that municipalities were granted a three-year window to adopt the International Public Sector Accounting Standards (IPSAS), a process which Swakopmund only finalized in 2026. She suggested that financial information not yet recorded or presented in strict accordance with IPSAS requirements during this transitional period might have been categorized by the audit as "missing," "unallocated," or "incorrect." This explanation points to Swakopmund IPSAS implementation issues as a contributing factor to the audit's critical assessment.

Mupupa also clarified that the municipality had not yet formally received the Auditor General's report, indicating that a detailed response to the specific audit points would only be possible upon its official receipt. She firmly refuted any allegations that the municipality was intentionally misrepresenting financial information or misusing public funds, reiterating the institution's commitment to transparent financial reporting, sound financial management, and the responsible administration of public resources.

Addressing the specific concern regarding property valuation rolls, Mupupa highlighted that these are typically updated every five years. She confirmed that the latest valuation roll for Swakopmund was completed on June 22, 2026. This, alongside the full implementation of IPSAS, means that both the valuation roll and the accounting standards were current as of June 30, according to Mupupa. The municipality expresses confidence that these recent advancements will be positively reflected in the outcomes of future audits, aiming to restore Swakopmund financial reporting accuracy.

The persistent audit failures and the significant N$480 million misstatement in property values at the Swakopmund Municipality carry substantial implications for financial integrity and public trust. Such inaccuracies in municipal records can undermine confidence in the administration of public assets and raise questions about the reliability of financial statements, which are crucial for informed decision-making by stakeholders. The fact that N$1.6 billion in land and property assets are based on outdated records suggests a systemic challenge in maintaining accurate asset registers, potentially indicative of broader Namibia municipal audit failure trends.

For legal professionals and compliance officers, these findings underscore the necessity for heightened due diligence, particularly when advising clients on property transactions or investments within the Swakopmund Municipality. The reported discrepancies, where properties transferred to private individuals remain on municipal books, create a landscape of potential legal and financial risks. Parties involved in property dealings must be acutely aware of the possibility of inaccurate municipal property records and valuations, necessitating thorough independent verification to mitigate risks associated with misstated assets or unclear property transfers.

The municipality's explanation, linking the issues to the transition to IPSAS, while plausible, also highlights the complexities and potential pitfalls of such significant accounting standard implementations. These challenges can temporarily, or even persistently, affect Swakopmund financial reporting accuracy, impacting not only internal governance but also external perceptions and investment decisions. The situation necessitates robust oversight and a clear roadmap for ensuring that new standards translate into genuinely accurate and transparent financial disclosures, safeguarding public resources and fostering economic stability.

Lawyers and compliance officers advising clients on property transactions or investments within the Swakopmund Municipality should be aware of potential inaccuracies in municipal property records and valuations, as highlighted by the Auditor General's findings. This necessitates heightened due diligence to mitigate risks arising from misstated assets or unclear property transfers, and may indicate broader compliance challenges in municipal financial reporting during IPSAS transitions across Namibia.

Source: Original reporting via news reports