Audit sniffs out rot in Industry ministry

Source: Audit sniffs out rot in Industry ministry | The Herald December 23, 2016

Zvamaida Murwira Senior Reporter—

THE Ministry of Industry and Commerce advanced $24 million to Zimbabwe Iron and Steel Company and the Industrial Development Corporation without signing requisite loan agreements, an audit has revealed.This was said by Public Affairs Committee chairperson Ms Paurina Mpariwa in the National Assembly on Tuesday while presenting an audit report compiled by Auditor-General Ms Mildred Chiri. “It was observed that the ministry issued loans to Zisco Steel and IDC amounting to $12 658 331 without signing loan agreements. In 2014, the ministry further issued $11 663 363 to the same parastatals again without loan agreements. In the absence of loan agreements, the legality of the advances could not be ascertained,” said Ms Mpariwa.

“The ministry informed the committee that Zisco Steel and IDC had contracted loans from the China Exim Bank and experienced challenges in servicing the loans. The ministry then approached Treasury, which in turn paid the amounts in question on behalf of the parastatal.”

It was noted that the loan agreements were only prepared after audit had raised the red flag.

“The committee, however, noted with concern the payment of over $24 million on behalf of Zisco Steel and IDC without the corresponding record of the liability in national accounts reflecting these amounts owing to central Government.

“It therefore makes it difficult for Treasury to adequately record the full extent of sums owing to Government by parastatals,” said Ms Mpariwa.

Audit had also noted that Treasury made direct payments totalling about $1,1 million to service providers on behalf of the Ministry of Industry and Commerce, but the ministry did not obtain receipts from the respective service providers. “The audit found out that the ministry did not have receipts supporting the payments and there were no reconciliations showing the invoices paid and actual amount owed to each service provider. There was also a variance of $32 538 between the figure provided by Treasury and the figure shown by the Public Finance Management system,” said Ms Mpariwa.

“In the absence of reconciliations and confirmation of payments made to service providers, it will be difficult to establish whether payments were made against existing debts and also monitor the ministry’s obligations to service providers.”

Chegutu West MP Cde Dexter Nduna (zanu-pf) rapped the Ministry of Industry and Commerce for failing to sign loan agreements with Zisco Steel and IDC.

He said he was aware of the fact that the Industry and Commerce Ministry was about to release $2 million to the judicial manager of David Whitehead Textiles, which he said was not enough to resuscitate the textile company.