The Keetmanshoop Municipality has accumulated losses totalling N$77 million over the past three years, while its liabilities exceed its assets by N$199,831.
These damning findings were revealed in the audit reports for the financial years that ended June 2020 and 2021.
In the audit reports, the Auditor General's Office raised concerns about the "material uncertainty" regarding the municipality's ability to continue as a financially stable business.
The report revealed that no supporting documents were available for adjustments to the appropriation account amounting to N$4 million.
Creditors' accounts differed from trade payables by N$3.4 million and N$465,323 for the financial years 2021 and 2020, respectively.
Supporting documents were also lacking to verify payables amounting to N$5.2 million and N$4.4 million for the financial years 2020 and 2021, respectively.
The Value Added Tax balance further differed by N$11.1 million in 2021 and N$11.9 million when compared to returns submitted to the Receiver of Revenue, while input tax was overdeclared by N$10.3 million for the financial year 2021.
Assets valued at N$76.4 million in 2021 and N$74 million in 2020 could not be verified.
Inventory listings did not match the figures in the financial statements, resulting in differences of N$759,514 in 2021 and N$23.1 million in 2020.
Direct deposits of N$2.6 million in 2021 and N$341,116 in 2002 could not be cleared from the previous years and the year under review.
Debtors' account balances at year-end stood at N$15.8 million in 2021, including various accounts not reconciled, cleared at year-end, and agreed to supporting documents.
The municipality also incorrectly classified consumer deposits of N$2.3 million in 2021 and N$2.2 million in 2020, as well as value-added taxes of N$1 million and N$3.5 million for the financial years 2021 and 2020, respectively.
The AG further flagged the absence of cash and loan reconciliations to the financial statements.
Supporting documents also lacked for expenses amounting to N$692,456, while N$5.7 million received in 2021 from Keetmanshoop Electricity Business was not reconciled, resulting in an overstatement of the income.
The AG's Office issued an adverse opinion for both audit reports.