LOCAL authorities across the country have been exposed for abusing millions of US dollars and failing to account for actions that prejudice ratepayers of proper service delivery.
According to the Auditor-General’s report for the financial year ended 31 December 2020 on local authorities, massive corruption and bad corporate governance were reported at several councils, including Harare, Bulawayo, Masvingo, Gweru, Chiredzi, Gokwe, Nyanga and Chitungwiza.
Bad corporate governance resulted in the abuse of ratepayers’ money and a deterioration of service delivery. The fraudulent sale of housing and commercial stands was also rampant countrywide, just like in previous audits.
Harare was accused of failing to account for over US$1 million. Its accounting system is shambolic, facilitating opaque transactions.
“The council’s cash books were not furnished for audit. Cash receipts and payments journals linked to the bank accounts were also not availed. Reconciliation of bank accounts, EcoCash accounts were not being done and proper checking and authorisation of the same was not being done. Some of the bank accounts were not in the accounting system,” the report reads.
Harare conceded failure to account for some of the money, saying the council did not have the proper accounting systems in place.
“The urgency for a well-maintained trade and other payables’ record cannot be under-estimated, and the new ERP (Enterprise Resource Planning) is targeting to eliminate this teething problem,” City of Harare management said in response to the audit report.
Auditor-General Mildred Chiri also flagged Masvingo for failing to account for US$137 713 meant for the procurement of 545 drums of bitumen in 2016, which are yet to be delivered five years on.
“The council purchased five hundred and forty-five (545) drums of bitumen from Podilla Ventures (Private) Limited in 2016 valued at US$137 713. However, the bitumen had not been delivered and the money paid had not been recovered by the time of my audit in August 2021,” the report reads.
“The 2020 annual report had 42% governance issues which are perennially related to the absence of key policies, non-compliance with laws and other regulatory provisions and mismanagement of assets. Bulawayo City Council, Gweru City Council and Chiredzi Town Council, among others, were operating without key policies and procedure manuals.”
Gweru, Gokwe and Nyanga RDC were found in breach of procedural allocation of stands, with Gokwe allocating two stands to minors.
“Gweru City Council was utilising estate for recurrent expenditure instead of capital expenditure as required by the Urban Councils Act [Chapter 29:15]. Moreover, the city council was involved in unprocedural allocation of stands to two minors.”
“In 2018, Gokwe Town Council allocated a commercial stand measuring 8750m2 to the town council chairperson without following due processes. In 2018, Nyanga Rural District Council recorded US$536 500 as stand deposits but could not provide any supporting documents for such funds,” reported Chiri.
The issue of possible fraud in stand allocation is more apparent at Chitungwiza Town Council where the Auditor-General reported that employees have a leeway to loot by intercepting payments for plan approval from clients. This prejudiced the local authority of revenue.
“The council was allowing employees to intercept payments from clients for plan approval. As a result, employees were collecting and utilising the funds for personal use. Upon enquiry, the council highlighted that the practise emanated from the memo issued by the town clerk where employees’ salaries to cover properties directly belonging to the employee or employees’ parents or in-laws.”
The same municipality was in the firing line for effecting salary increments without approval from the relevant minister, hence compromising service delivery.
“Management salary scales that were applied from August 2018 were not approved by the minister of Local Government and Public Works (July Moyo). Service delivery may be compromised as funds meant for service delivery are diverted to salaries and wages,” reported the Auditor-General.
Chiri urged Harare and other local authorities to implement the audit findings if there is to be sanity in the operations of council.