Zimbabwe’s State-Owned Enterprises Paid Millions For Goods And Services That Were Never Delivered

Source: Zimbabwe’s State-Owned Enterprises Paid Millions For Goods And Services That Were Never Delivered

The Auditor-General’s Office has found that several state-owned enterprises in Zimbabwe paid millions of dollars for goods and services that were never delivered.

In her latest report for the financial year ending December 31, 2022, the Acting AG Mrs Rheah Kujinga, revealed that public entities also suffered significant financial losses. For instance, the Zimbabwe Revenue Authority (ZIMRA) experienced a loss of $209 million after purchasing vehicles that were not fully delivered, The Sunday Mail reported citing Kujinga’s report. Despite making the payment in February 2022, only 15 out of 35 Toyota Hilux vehicles were received, and none of the 50 Toyota Corolla vehicles were delivered by December 2022. Read the report in part:

The authority paid $209 million for procurement of 35 Toyota Hilux double-cabs and 50 Toyota Corolla vehicles on February 24, 2022. However, the supplier had delivered 15 of the 35 Toyota Hilux and none of the 50 Toyota Corolla vehicles.

ZIMRA’s internal system for managing travel and subsistence expenses was found to have weaknesses that could be exploited. As a result, the authority was owed a total of $73.8 million by staff members for travel and subsistence allowances as of December 31, 2022.

Even the Zimbabwe Anti-Corruption Commission (ZACC) faced issues with its procurement process. They spent $345,918 to buy 10 motor vehicles but only received five. The Acting Auditor-General also mentioned that ZACC didn’t provide reconciliations with their creditors and didn’t provide supporting documents for expenses totalling $353,472 (valued at US$21,078 at that time). She added:

There were no invoices and or supplier statements to support the expenditure.

Managers at the National Social Security Authority (NSSA) were criticised for not considering the tax implications on allowances and benefits. This led to the authority including school fees and fuel allowances in the gross income for tax purposes. Additionally, one manager received a gym subscription of US$200 and various allowances outside of their employment contract, without proper tax remittance. Read the resort:

The manager also received a holiday allowance amounting to US$ 15,000 and a retention allowance amounting to $ 120,994, which was also processed outside the payroll net of tax. The tax thereof amounting to $80 663 was not remitted to ZIMRA.

The report also highlighted issues at Air Zimbabwe, where unrecorded aircraft were found, and at the Zimbabwe National Road Administration (ZINARA), where tollgate exemptions were given without proper approval.

Furthermore, some parastatals have not submitted financial statements for up to five years. The Acting Auditor-General reported a total of 170 governance issues, compared to 81 in the previous year, including unsupported expenditures, accounting policy non-alignment, inadequate controls, and non-compliance with tax laws.