Kasukuwere snubs audit reports

Source: Kasukuwere snubs audit reports | The Financial Gazette June 16, 2016

last week gave Local Government and National Housing Minister Saviour Kasukuwere audited financial statements for the business units owned by the Harare City Council.
This followed his suspension the previous week by acting Local Government Minister Jonathan Moyo for resisting the government-sanctioned audit, 24 hours after Moyo had reinstated the beleaguered mayor from suspension over the appointment of town clerk, James Mushore.
The Financial Gazette established this week that the companies Kasukuwere wanted investigated had in fact up-to-date audits carried out by international audit firm, KPMG.
The companies include City Parking, Sunshine Meats and Mabvazuva.
They operate as subsidiaries of Harare Sunshine Holdings (HSH).
This newspaper reported a few weeks ago that City Parking, which Kasukuwere wants investigated, has been regularly audited since its inception in 2013.
The Financial Gazette is in possession of two audit reports for 2013 and 2014.
KPMG last month informed HSH, through its chief executive officer, Alois Masepe, that it had completed the 2015 audit whose report is expected next week.
Manyenyeni took the two audit reports to Kasukuwere last week but the minister was not interested in the audits but the dismissal of new town clerk, James Mushore. In fact, Manyenyeni had visited Kasukuwere twice on Thursday and Friday as he sought a common understanding with the minister on the issue.
Manyenyeni confirmed the development this week, saying: “I gave him the reports last week. He doesn’t even want to talk about it. Every discussion is about Mushore, nothing else,” he said.
Sources close to the development said Kasukuwere had confronted Manyenyeni way before the Harare City Council appointed Mushore and warned him against the move. The sources said the two had met at the National Sports Stadium on April 18 for Independence celebrations.
Mushore was then appointed town clerk at a special council meeting three days later, with Kasukuwere nullifying the decision immediately.
Asked about his encounter with Kasukuwere prior to the appointment, Manyenyeni said: “He (Kasukuwere) told me about dissolving council at the Independence function. He hinted on the involvement of the President twice. He repeatedly stated that he would use the Local Government Board to block him (Mushore). He has decreed over eight times that Mushore must not be town clerk, even well before council approved him.”
Whereas Kasukuwere had, on July 27 last year, ordered the forensic audit claiming he had received reports of corruption and abuse of funds at City Parking, KPMG reports dismissed such claims.
The Financial Gazette saw the two unqualified audit reports for 2013 and 2014. In audit terms, an unqualified report is one which gives an organisation a clean bill while a qualified report is the one that would have sniffed out financial irregularities recommending further action.
The audits are dated February 2 and August 5, 2015.
As reported by this newspaper last month, Kasukuwere wrote to Manyenyeni, on July 27, 2015 saying he was “disturbed by a number of reports emanating from various sources about issues of corruption at Easipark and City Parking”.“It would appear that these allegations may be true due to the absence of any audit report for these entities in recent years,” said Kasukuwere in his letter to Manyenyeni.
He then ordered council to engage forensic auditors to provide a report on the operations of the two businesses within two weeks of receipt of his letter.
Kasukuwere said he would want a preliminary report on the same issue within six weeks of engaging the auditors. In fact, at the time Kasukuwere ordered the audit on July 27 last year, City Parking was already in the middle of a third audit.
According to provisions of the Companies Act, a forensic audit arises only if a normal audit has sniffed out irregularities and recommended such an audit.
Some council officials said Manyenyeni and fellow councillors may have made a tactical blunder by “unwittingly fighting against a ministerial directive and arguing that the minister had no mandate to demand the audit of council’s private companies.
Instead, they said, Manyenyeni should have “just given the minister the true information about City Parking’s audit status”.
“ Manyenyeni was correct, legally, but the Minister was playing politics,” said one council official who cannot be named for professional reasons.
Information gathered this week also shows that there was already a processes to facilitate the audit as demanded by Kasukuwere as far back as September last year.
Written correspondences show that Manyenyeni, upon receiving the letter of demand from Kasukuwere, sought advice from Ncube, who was acting as town clerk, and chairman of council’s business committee, Peter Moyo.
Ncube, however, proceeded to write to the Auditor General, Mildred Chiri, seeking to engage her.
Chiri, however, said her mandate was to audit State enterprises, government departments and local authorities and had no business auditing City Park since it was a private business.
Ncube then asked for guidance on which audit firm to consult and ended up hiring PriceWaterhouseCoopers.
The audit firm, however, hit a brick wall after council said procedurally, only the HSH board, chaired by local government expert, Percy Toriro, could institute a forensic audit.
Toriro said in an interview on Monday that they had not seen any need for a forensic audit since normal audits had been clean.
“We have nothing to hide at all. We are informed by previous audits and they have been clean. After all we were kept in the dark on these developments. We don’t really know what’s happening,” he said.
When contacted for comment, Kasukuwere said: “I have always said there is nothing political about government’s position on Mushore. What we do not want is to nurse a culture of disrespecting the law and we are saying the law must be followed. We will maintain that position.”