Zimbabwe government fails to account for US$140m

via Govt fails to account for US$140m | The Financial Gazette by Maggie Mzumara 27 Mar 2014

AT least US$140 million haemorrhaged out of the ailing Zimbabwean economy unaccounted for from government ministries and departments, highlighting an acute degree of mismanagement of public funds.

According to the recently-printed report from the Auditor-General which covers the financial year ending 2011, and is the latest published since 2012 and 2013 are not yet out, un-acquitted amounts for that year totalled US$140 681 657.

These amounts leaked out of the system as a result of wasteful administration of the public funds. This came about through outstanding amounts, unrecovered advances and debts, un-vouched expenditure, fraud and failure to disclose or account for financial assets by government ministries and departments.

Auditor-General, Mildred Chiri, in a summary of the report, said key issues she observed “on account of all persons entrusted with public moneys or State property” during the audit were un-vouched expenditure; poor management and control of assets; failure to follow proper tender procedures; wasteful expenditure; fraudulent activities; and failure to submit year-end returns for audit; among others.

An illustration of mismanagement is by Transport and Infrastructural Development Ministry where public financial assets amounting to US$45 380 000 could not be acquitted. “… I raised concern over the Ministry’s failure to disclose public financial assets amounting to US$45 380 000 relating to the disbursements made to the Zimbabwe National Road Administration, TelOne, National Railways of Zimbabwe and Civil Aviation Authority of Zimbabwe. The same amount was not disclosed in the Statement of Public Financial Asset submitted for audit, thus reflecting the incompleteness and inaccuracy of information disclosed,” said Chiri in the report.

The Local Government, Urban and Rural Development Ministry could not liquidate loans totalling US$30 792 450 granted to local authorities for the benefit, among others, of traditional leaders. The Education, Sport and Culture Ministry, as at December 31, 2011 had an outstanding debt it was owed and which had not been recovered of US$1 296 685. “The Ministry did not put concerted effort to recover the debts…,” Chiri noted.

Lands and Rural Settlement registered an outstanding revenue of US$4 618 344 which the audit could not verify “as the Ministry did not produce a database of all debtors under its charge”.

Although amounts of public funds were staggering for the year under focus, Chiri told the Financial Gazette yesterday that similar challenges in public funds management have been recurring in recent years.

“…Issues of expenditure not adequately supported, management of control of assets, delays and failure to submit year-end reports and flouting of tender procedures tend to recur over the years,” Chiri said.

She attributed the challenges to: untrained staff; manual processing of accounting and other information resulting in errors and poor filing; shortage of computers; poor telecommunication systems; freezing of posts which has resulted in shortages of accounting staff; weak internal controls and poor service delivery, among other causes.

Although Chiri insisted to the Financial Gazette that government ministries and their departments respected her office and positively responded to her recommendations, the report notes numerous occasions where issues raised and recommendations made in previous audits remain either unattended to or unresolved in the subsequent audit.

What is also noteworthy in the audit report is that the Ministry of Finance, which one would expect to be exemplary in administration and management of public funds, leads the pack in unaccountability – flouting procedures wholesale.

“Contrary to the requirement of Accounting Policies and Procedures Manual section 2.9 and Treasury Instructions 1200 and 1205 which states that whereas payment voucher is submitted covering a number of requisitions, invoices or statements,” reads part of the report, “the voucher shall contain sufficient information to enable the expenditure to be verified in the event of any of the documents becoming detached. All documents shall be marked ‘supporting voucher only’. The Ministry made payment amounting to US$34 974 339 to international creditors without raising payment vouchers.”

Another point of interest is that while the formations of the Movement for Democratic Change (MDC) have often pointed a finger at ZANU-PF as the party that mismanages resources, claiming that “corruption is in ZANU-PF’s DNA”, the report covering as it does the period under the inclusive government, shows that maladministration of public funds was found across the board – from ministries that were under each of the three parties in the government of national unity.

None of the parties emerged clean in this regard, with the Prime Minister’s Office failing to transparently vouch for expenditure in excess of US$15 million. “Out of the expenditure of US$15 021 960, the Office (of the Prime Minister) failed to provide me with 24 payment vouchers for my audit examinations,” said Chiri.

She further observed of the former premier’s office that: “Out of the advances totalling US$315 118 which were issued during the financial year under review, an amount of US$168 425 was still outstanding at the end of the financial year.” However, Chiri told the Financial Gazette that she is optimistic that management of public accounts could improve in the near future.

“The coming into effect of the Public Finance Management Act (Chapter 22:19) now requires all accounting officers to be more accountable and penalties may be muted upon those who to fail to account,” she said, adding, “The recent increased discussion of the anomalies by the various Parliamentary committees and publication by the media of my reports has also gone a long way in enforcing accountability.”