Noczim prejudiced of US$16m

via Noczim prejudiced of US$16m – The Sunday Mail Mar 8, 2015

Officials at the National Oil Company of Zimbabwe cannot account for US$14,6 million of taxpayers’ money they accessed from the Debt Redemption Fund, and the parastatal is yet to take delivery of US$1 million worth of diesel bought four years ago.

Government established the Debt Redemption Fund on February 11, 2004 to amortise Noczim’s debts as set out in Section 3 of the fund’s constitution and Section 36H of the Income Tax Act (Chapter 23:06). A Debt Redemption Levy is charged on all fuel imports and is collected by the Zimbabwe Revenue Authority at all borders.

In her report for the year ending December 31, 2013, Comptroller and Auditor-General Mrs Mildred Chiri said the fund forked out US$4,4 million to buy five million litres of diesel.

However, after making payment for the fuel, some 1 096 890 litres of diesel worth US$965 263 never reached Petrotrade, a Noczim subsidiary.

It is also noted in the audit report that the supplier has dodged contractual obligations by claiming he incurred costs of US$504 000 while executing the supply agreement.

Mrs Chiri said the matter had remained unresolved for over two-and-a-half years and “the fund may be prejudiced of financial resources and might result in a major loss to the fund”.

The Comptroller and Auditor-General said transactions amounting to US$14,6 million were not supported by required documention.

“There were no payment vouchers and receipts as well as proper books of accounts in the form of journals, ledgers and cash book to support the expenditure incurred and income receivable disclosed in the financial statements.

“This was contrary to the requirements of Section 6(a) of the Debt Redemption Fund’s constitution which states that the secretary shall ensure that proper accounts and other records related to the fund’s operations are kept.

“Failure to maintain proper books of accounts may lead to the fund losing out on income due to it as there will not be a clear audit trail of the funds received from the collecting agent which is the Zimbabwe Revenue Authority.”

It also emerged that the Debt Redemption Fund was operating without instructions from an accounting officer, leaving room for deviation from good accounting and administrative practices.

The audit said the fund was operating a double signatory account valued at US$50 million but had not been audited since 2009 by internal auditors from the Energy and Power Development Ministry in contravention of Section 80 of the Public Finance Management Act.

“Lack of an effective internal control system may lead to the fund’s administrators diverting funds to non-core business of the fund and may also create an opportunity for abuse of the fund’s resources.

“There is risk that the fund’s resources may be susceptible to improper use as there are no parameters regarding the application of the fund’s financial resources. This, therefore, creates room for diversion of funds to non-core activities,” the report said.

In response, Noczim management said: “The fund relies on the remittances done by Zimra to it. So the fund has no way of ascertaining that the funds so remitted are indeed all the collections that will have been done by Zimra.”