The curious case of ZIMDEF’s financials

Source: The curious case of ZIMDEF’s financials | The Financial Gazette July 20, 2017

THE Zimbabwe Manpower Development Fund (ZIMDEF) this week drew unwanted attention to itself after, once again, publishing truncated financial statements in the national press.
The manpower fund, among the cash-rich public entities, manages annual revenues of about $40 million.
ZIMDEF funds are drawn from a one percent levy of industrial firms’ gross wage bill, ostensibly to provide funding for training and manpower development.

ZIMDEF reported a $6,5 million surplus in 2015, but followed this up with a $390 000 deficit in 2016, a year in which the fund found itself in the news for all the wrong reasons.
The Zimbabwe Anti-Corruption Commission has accused Higher and Tertiary Education Minister Jonathan Moyo, ZIMDEF’s sole trustee, of abusing the fund by diverting as much as $400 000 to programmes outside the fund’s remit.

Moyo, who denies the charges, has in turn accused the anti-graft watchdog of pursuing a political agenda.
The case remains before the courts, but Moyo has admitted to using some ZIMDEF cash to support ZANU-PF political programmes.

ZIMDEF published similarly truncated financial statements in 2016, but largely escaped attention.
This year is different, for obvious reasons.
A journalist’s tweet querying why ZIMDEF plunged to a deficit elicited a prickly response from Moyo: “I see you and your lot can’t deal with transparency. You’re acting like a MacGyver over audited accounts published by us in all newspapers!”

Taking the transparency cue from its minister, ZIMDEF followed up with a press statement on its financial statements, but only succeeding in muddying the waters.
“The deficit reported in the Statement of Profit or Loss and other Comprehensive Income included the provision for doubtful levy debtors amounting to $3 049 018 and this is reported under Administrative Costs,” ZIMDEF volunteered.

The deficit, it added, is from levies owed by “hardcore debtors” including some State enterprises and local authorities.
ZIMDEF then rounded up by admitting that its financials did not include detailed notes which would have helped break-down its numbers, but offered to make these available to “interested stakeholders” upon request.

The Financial Gazette took ZIMDEF on its word and sought to access the said notes.
As it turned out, this was never going to be a simple task. An official informed our journalist that the request had to be “formal”, in writing and on an official letterhead.

“We want to know who we are giving the information to and what they want to use the information for. They have to be accountable for the information,” said the official.
ZIMDEF has not always been cagey with its financials. Between 2011 and 2013, the fund provided more information on its expenditure.

Expenses were broken down to show what ZIMDEF spent on grants and rebates, building projects, grants to training institutions, apprenticeship costs, industrial training and trade testing, administration expenses, National Manpower Advisory Council expenses as well as impairment losses.
ZIMDEF’s annual income has ranged between $34 million in 2011 and $49 million in 2015, while its expenses have shot up from $23 million in 2011 to $42 million over the past two financial years.
Administration expenses have doubled over the same period.
The fund’s surplus has come down from a peak of nearly $13 million in 2012, to last year’s $390 000 loss.