Shoddy accounting exposes council to US$190m prejudice

Source: Shoddy accounting exposes council to US$190m prejudice | Herald (Top Stories)

Mrs Mildred Chiri

Farirai Machivenyika Senior Reporter

SHODDY accounting by Harare City Council could have cost the city about US$190 million after the council failed to verify some of the money in its books of accounts, while some service providers could have been overpaid.

There was no accounting inventory kept of developed land stands, allowing misappropriation of public assets.

The 2020 Auditor-General’s report exposed a number of anomalies in the council’s books of accounts.

“In terms of the International Public Sector Accounting Standard 1: Presentation of Financial Statements, the council should fairly present financial information and must faithfully represent its affairs,” said Auditor -General, Mrs Mildred Chiri, in the report.

“According to the council, trade and other payables to the tune of US$105 542 322 were unverifiable. In addition, trade and other payables totalling US$83 712 713 had debit balances and should have been reclassified. 

“This suggests that the council might have prepaid or overpaid suppliers and has to recover the same.”

Mrs Chiri said in terms of the standard on inventories, IPSAS 12-Inventories, developed land for resale and treated water should be treated as inventory. 

The inventory records for the land and water were non-existent and there was neither presentation nor disclosure to this effect. 

“No land bank records are kept by the council which forms the basis for internal control in regard to land sales,” said Mrs Chiri. 

This could result in financial loss as a result of misappropriation of public resources and litigation, while compromising service delivery.

On Friday, a sub-committee on Local Authorities of the Parliament’s Public Accounts Committee visited Town House to follow up on issues raised by the Auditor-General, but the meeting was aborted due to the absence of most senior council staff.

The sub-committee’s chairperson and Chegutu West legislator, Cde Dexter Nduna, said council had promised to avail the records on land by the end of last year, but had not done so.

“They said they were going to produce that by December 31, but nearly four months down the line, there is nothing and there is no one to answer to that,” he said.

“There is also money that has been used, but is not verifiable, that has been mentioned by the Auditor-General. US$83 million is one such figure that is missing and a further US$105 million is also missing.” 

Cde Nduna said the sub-committee had resolved to give council two weeks to appear before it to answer to the issues.

Acting Harare Mayor , Stewart Mutizwa , welcomed the efforts by Parliament, saying the move would assist council in exposing mismanagement of funds. 

There are concerns across the city that the opposition-run council has dismally failed residents since 2000, with its officials and councillors engaged in corrupt activities while ignoring service delivery.

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