THE government lost millions of dollars last year through deliberate deviation from laid down procurement regulations, lack of corporate governance and financial indiscipline in several ministries, State enterprises and parastatals.
Source: Govt loses millions through financial indiscipline – NewsDay Zimbabwe June 24, 2016
BY OBEY MANAYITI/VENERANDA LANGA
This was revealed in Auditor-General Mildred Chiri’s 2015 report, which was tabled in Parliament on Wednesday by Finance minister Patrick Chinamasa.
Chiri disclosed that a number of ministries incurred almost $22 million expenses that were not supported by source documents, making it difficult to ascertain whether the expenditure was properly incurred to constitute a proper charge on public funds.
It was also revealed that some ministries used money in bank accounts under their administration as collateral security for loans issued to private individuals, exposing the government to losses of huge amounts.
There were also differences between expenditure amounts reflected by the Public Financial Management System and that of the Sub-Paymaster General Accounts for seven ministries of nearly $71m.
According to the report, the ministries did not produce reconciliation statements showing the sources of differences.
Some ministries failed to pay over $53m for goods and services received, a move that is against standing instructions requiring ministries to pay as soon as they get the services. The AG said she feared ministries could incur overruns on contracts and be sued.
Under revenue collection and debt recovery, the report highlighted that due to inefficient accounting systems, at least two thirds of the ministries failed to collect dues from clients and employees totalling $48,8m. The huge chunk of the money has not been collected for up to six years.
Chiri said State Enterprises and Parastatals continued to be plagued by lack of good corporate governance systems.
“Some board members borrowed from institutions that they have oversight responsibility, while some entities continued to operate without boards following the expiry of terms of the previous boards and these entities included Printflow and Minerals Marketing Corporation of Zimbabwe,” she said.
Zinara, in its 2014 accounts, was adjudged as having incurred substantial expenditure of $2 419 511 that was not supported by adequate documentation, which could imply loss due to fraud and payment of fictitious suppliers.
NetOne failed to service its loans resulting in penalty charges of $1 696 748 and that its current liabilities exceeded its current assets by $55 616 801 as at December 2014.
Other companies whose current liabilities exceeded their current assets were Zesa by $65m, Chinhoyi University of Technology by $3m, Zimpost by $23m, and TelOne, which had a net liability position of $163m as at December 31, 2014. Zimbabwe Power Company failed to service its overdue foreign long-term loans of $324m.
“The National Railways of Zimbabwe was operationally handicapped, as more than 50% of its locomotive fleet was down. A number of entities were paying board fees, management salaries and benefits, which were not authorised or which were not subjected to tax,” the AG said.
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