Independent auditors have distanced themselves from making an opinion on the 2012 financial report of the Botswana Mine Workers Union (BMWU) because it is not in a good state.
According to auditors, the union does not keep a detailed asset register or provide them with the title deed for all investment properties.
“In the absence of the assets register completeness of property plant and equipment could also not be verified. Without the title deeds for the investment property ownership of such property could also not be verified. Non-compliance by the union with IAS 16 and 36. We cannot confirm the effect of the same on the annual financial statement,” Mazars auditors stated.
It also says completeness of subscription income amounting to P7, 376,903 could not be verified as no confirmation from members were availed to them. The report says the union receives subscription income from its members in various branches, and in the absence of the members list/register showing names of the members and amounts due per member they could not satisfy themselves as to the completeness of the recorded income.
The auditors said: “Because of the significance of the matters described in the basis for disclaimer of opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the annual statements.”
The auditors further revealed that they are unable to account for shares, which are being managed by Fin Craft Investment Management and the value of shares as at December 31, 2012 from the investment mangers.
The auditors said they are unable to confirm the accuracy and the existence of the investment balance of P5, 247,129 as recorded in the union books.
The auditors also blamed the union for failing to account for rental income from its investment properties.
“The effect of such omission on the financial statements could not be quantified in the absence of adequate information. The union also receives commission income from Kredicell based on the amount of loans issued to its members, we were not availed with information relating to the amount of loans issued to the union’s members hence we could not verify the completeness of the recorded commission income amounting to P210, 162.50. The other income may be overstated/understated,” the audit report says.
The report shows that auditors could not satisfy themselves with the existence, accuracy of staff salaries amounting to P2, 443,890.11 since the union failed to provide them with payrolls.
The union also failed to provide auditors with receipts for rentals it pays to Botswana Housing Corporation (BHC) amounting to P152, 397. The auditors say this might lead to fraud since there is no proper accounting.
The BMWU president, Jack Tlhagale said the auditors’ standard of auditing was higher than theirs and that explains why their financials appeared to be in a bad state.
“Our bookkeeping for 2014 is going to be different from the 2012 audit report. We have also engaged professional accountants,” Tlhagale explained.