The Sunday News
Harmony Agere and Brian Chitemba, Harare Bureau
PUBLIC officials in State-owned enterprises (SOEs) and Government departments might soon face the music after the Auditor-General, Mrs Mildred Chiri, uncovered continued dereliction of duty and deep-seated malfeasance, especially in accounting procedures and procurement processes.
Local authorities are also wrapped for continued malpractices.
The audit was for the year ending 31 December 2018.
The new political administration, which is currently reforming SOEs, has already promised remedial action to stem continued malfeasance in public entities.
At a Press briefing last week, Mrs Chiri ominously indicated that some of the discrepancies, particularly related to procuring goods and services, may have been occasioned by outright criminal activities and have since been referred to Zimbabwe Anti-Corruption Commission (Zacc).
Our Harare Bureau has established that the Government will soon write letters to all parastatals and departments emphasising the need to urgently act on the recommendations, not only of the new audit report, but on legacy issues that have been raised in the past.
Most worryingly, the acts of omission or commission are understood to be bleeding State coffers.
As of 31 May 2019, 76 SOEs and parastatals out of a total of 179 entities had not yet submitted their financial statements for audit by Government.
Some of the shocking details uncovered by the Auditor-General’s Office include the case where the Zimbabwe Electrification Transmission and Distribution Company (ZETDC) — a unit of Zesa — has not yet taken delivery of transformers nine years after making a US$4,9 million payment to Pito Investments.
“The same contractor was also paid in advance an amount of US$561 935 by the Zimbabwe Power Company in 2016 and has not delivered,” said Mr Chiri.
“In addition, ZPC also paid 196 064 rand in 2016 to York International for gas that has not been received.”
ZETDC was previously advised to pursue the delivery of paid goods and services but did not implement the recommendations.
The case mirrors the rot in most public entities as they continue haemorrhaging millions of dollars from botched deals.
GMB was also flagged for a similar deal, where it made an advance payment of $1 million in 2016 for goods and services that were never delivered.
Air Zimbabwe also could not escape the attention of auditors for murky accounting practices.
Expenses worth more than $14 million could not be accounted for.
“The company could not provide supporting documentation for operating expenses amounting to $13 million and petty cash expenditure amounting to $654 587,” said Mrs Chiri.
“The airline also had an unexplained suspense balance of $27 million. The company has not accounted for all aircrafts,” read part of damning report.
Cash withdrawals amounting to $173 162 could not be traced to the books of accounts.
The Auditor-General also flagged a curious case involving examination management body Zimsec, which continues to outsource printing services even after splashing US$3 million on its own printing press in 2016.
The parastatal notably spent US$2,1 million for printing the June and November examination papers the following year.
Ironically, the money splurged on outsourcing the service is significantly more than the US$1,3 million that was needed to commission its own printing press.
“I noted that the printing press was installed in 2018 after a part payment of US$3 million, leaving a balance of US$1,3 million,” said Mrs Chiri.
“Due to the outstanding balance, the council (Zimsec) could not commission the printing press. As a result, the council had to outsource the printing of O-level June and November 2017 examination papers at a cost of $251 367 and $1 million, respectively.”
Another jaw-dropping case involves Allied Timbers, which operated eight bank and EcoCash accounts that were, however, not registered in its name.
In fact, some of the accounts were opened under names of individuals.
NSSA in the spotlight
Nssa’s questionable investments, some of which were made against financial advice, have also come under scrutiny.
More than $80 million was reportedly put at risk after it was invested in troubled banks.
Added Mrs Chiri: “Nssa invested Treasury Bills (TBs) amounting to $20 million with Metbank during the year despite the fact that the Authority’s risk and management department had recommended against this investment,” said Mrs Chiri.
“The bank had a nil trading limit due to the fact that its risk of default was high and was deemed to be financially weak.”
Nssa further placed $62,3 million worth of TBs with the same bank after reaching an agreement that Nssa’s board would advise Metbank on how the TBs would be used.
However, a Nssa officer subsequently instructed Metbank to use TBs with a face value of $37,4 million without authorisation from the board.
Auditors also indicated alleged malpractices at the Pig Industry Board, Civil Aviation Authority of Zimbabwe, Minerals Marketing Corporation of Zimbabwe and Zimbabwe United Passengers Company.