via POSB board members overpaid – The Zimbabwean 2 July 2015
The People’s Own Savings Bank (POSB) has been paying its board members fees far above those approved by treasury, a new report by the Auditor General for the 2014 financial year reveals.
The POSB joins an array of government-controlled departments and parastatals from which board members have been making a financial killing.
In the first quarter of 2014, POSB paid its board members $6,455 more than the prescribed $1,335 in total, while the bank overshot the mark by $8,542 in the second quarter. In total, POSB exceeded the board fee budget by $26,868 in 2014.
The AG, Mildred Chiri, said in the report that this led to financial loss as the board fee expenditure was not approved. In response to this accusation, POSB said the tendency to overpay board members had been inherited from the Zimdollar era.
“This is a legacy which carried on from the Zimbabwean dollar era when board members were being compensated in the form of fuel coupons. The board took a decision to convert fuel coupons and data bundles into quarterly board payments in order that the bank complies also with tax regulations,” said the bank in a statement.
It said the finance ministry was fully aware of the new rates and accused it of failing to respond to its repeated requests to increase board member fees.
The AG’s report noted that POSB was charged penalties and interests by the Zimbabwe Revenue Authority (Zimra) totalling $90,527 for applying incorrect tax calculations on board payments from 2009 to 2013.
The bank paid staff benefits including communication, holiday, canteen subsidy, security, water and electricity allowances outside the payroll and these payments did not reflect as Pay As You Earn (PAYE). The anomaly was unearthed by Zimra, which charged the bank a penalty and interest totalling $524,910 and $79,139 for failing to comply with the Income Tax Act.