Unconstitutional retention costs Zim millions in revenue

via Unconstitutional retention costs Zim millions in revenue | The Herald October 17, 2015

Walter Nyamukondiwa Chinhoyi Bureau
THE country could be losing millions of dollars through unconstitutional retention of revenue by some ministries and Government departments’ failure to prepare related accounts for auditing by the Auditor-General’s office.

The Auditor-General Mrs Mildred Chiri said audits showed that a number of Government departments and ministries were retaining funds without remitting to the Consolidated Revenue Fund.

This means that it is not known how much is raised and how it is used.

Government departments are expected in terms of Section 302 of the Constitution to retain funds when the relevant enabling Act is in place.

This, however, does not apply to retention arrangements entered into prior to the adoption of the Constitution.

“What we have found out is that there are quite a number of Government ministries that retain funds and we sought legal opinion from the Attorney-General’s Office,” she said.

“According to the Attorney-General’s Office, all funds which were formed before the Constitution have got the right to retain those funds. What we can talk about are fund accounts formed after the Constitution.”

She said the fund accounts formed before the Constitution can continue for as long as they are being used in terms of their constitution and mandate.

Mrs Chiri said she would have known if there were any new accounts authorised with the relevant enabling Acts after adoption of the Constitution.

“We take a cue from the Ministry of Finance and Economic Development in terms of any new developments but as of now that is not the case,” said Mrs Chiri.

Asked if the Auditor-General’s Office has access to the accounts for auditing purposes, Mrs Chiri said they have access to most of the funds except a few.

She refused to name or provide more details on the said funds.

“Yes, we have that access (to fund accounts) and we are mandated to have that access. Although there are some, there could be quite a few that have not prepared their accounts, but for the majority we have access to those funds and we can audit them,” she said.

The Auditor-General also expressed the same discomfort in her 2013 Auditor-General’s Report.

She noted: “The retention of revenue without enabling Acts by some funds was in violation of the Constitution and has an effect of reducing inflows into the main Exchequer Account.

In her recommendations then, the Auditor-General said retention of revenue without an Act providing for such action should be stopped in order to avoid contravening the supreme law of the land.”

Mrs Chiri said retention of funds could have been a survival tactic in the face of a liquidity crunch.

Many ministries and Government departments such as the Registrar-General’s Office retain funds.

“This could have been done because of noble intentions due to circumstances caused by the liquidity crunch but the most important thing is that it is done following proper procedures,” she said.

The Zimbabwe Revenue Authority (Zimra) has also raised similar concerns with departments such as the Zimbabwe Republic Police. Zimra boss Mr Gershem Pasi is on record saying that Government funds should be centralised to improve revenue and plug leaks.

He noted with concern that there were too many independent funds that were managed outside the central treasury fund.

The funds have a potential to be abused as they were not accountable. The Zimbabwe National Roads Administration retains some of the revenue it collects as is the case with ZRP.


  • comment-avatar

    It must be frustrating, trying to audit a Mafia Organisation!