Top ZOU staff evade tax says AG

via Top ZOU staff evade tax says AG – The Zimbabwean 1 July 2015

The Auditor General, Mildred Chisi, has exposed bad corporate governance practices at the Zimbabwe Open University (ZOU), a state-controlled higher learning institution.

In her latest report the AG said the university did not carry out required performance evaluation of senior employees and council members, which showed “non-compliance with principles of good corporate governance”.

ZOU, in its response, acknowledged that no appraisals were being carried out but said the matter was under consideration by the university council. The internal audit department reports directly to the vice chancellor, Primrose Kurasha. Ideally it should report to an audit committee.

There have been reports in the past that Kurasha had dipped into university coffers to fund private interests. “The university had no risk profile or register to guide the internal audit function in the execution of assignments,” said the AG. As a result, risks affecting the university may not be detected and corrected timely and internal audit functions may be compromised.

Huge allowances

The university also paid huge allowances to senior staff – including motoring benefits, guard services, entertainment, domestic workers, school fees and holiday expenses – which were not included on the payroll and therefore not taxed when when they should have been. In addition, ZOU was paying school fees allowances for senior management at rates exceeding those approved by council. In one such case, the university paid $4,320 for the finance director’s child studying at a university in Canada.

The report also made reference to a controversial partnership that ZOU entered into with a private investor to establish an internet based platform called ZOU Online. Management could not provide the AG with evidence or minutes to support that the project was approved by council.

ZOU maintained that council was represented on the ZOU Online board by a non-executive council member – even though they admitted that no council resolution was passed to formalise the approval of the platform. ZOU Online operations were halted in April 2011 amid speculation that it was designed to profit a few individuals. The distance learning institution failed to produce original invoices for some procurement transactions, providing photocopied documents instead. This was the case in transactions carried out with Esteem Travel involving $10,444, procurement of library books worth $8,510 and workshops attended by ZOU staff at the council for higher education (ZIMCHE).

The report noted that there was possible loss due to financial misappropriation of cash resources. ZOU was accused of making double payments for transactions while “no satisfactory explanations were given by management for the payments to suppliers who were previously paid”.

Double payments were made for business and foreign travel, to ZIMCHE and a company called Halsted Timbers. The double payments, said the AG, could indicate fraud.