…MPs fear leakages bleeding the country
AT least 34 government-owned enterprises are hiding behind the Covid-19 pandemic for failing to submit their financials for the Auditor-General’s scrutiny while others claim the brain drain has left them without capacity.
MOSES MATENGA
This state of affairs is heightening the risk of leakages and corruption in parastatals.
Several entities have failed to submit their financial accounts since 2017 in what the Parliamentary Public Accounts Committee (PAC) said was a clear violation of section 308 of the constitution and section 35 (6) of the Public Finance Management Act (PFMA).
Among the entities that failed to submit their books for auditing and cited various reasons are: Courier Connect, Medical Laboratory and Clinical Scientists Council Of Zimbabwe, Mining Promotions Corporation, Zimbabwe National Statistics Agency, Zimbabwe Youth Council and the Nurses Council of Zimbabwe.
According to a report of the PAC presented in National Assembly by Hwange East member of Parliament Tose Sansole on non-compliance with regards to the submission of financial statements to the Auditor-General by some state-owned enterprises and parastatals, several factors contributed to this worrying lack of accountability.
“Skills flight and brain drain of skilled workers has resulted in shortages of key personnel in the Accounts Departments of State-owned enterprises due to poor remuneration and working conditions,” the report reads.
Thousands of Zimbabweans are joining the exodus in search of greener pastures as the country’s economy continues failing.
Several state-owned entities blamed the Covid-19 pandemic, with the Nurses Council of Zimbabwe, Zarnet, ZimPost and many others saying the pandemic forced them to shut their offices and work from home where they did not have enough resources.
“Covid-19 derailed the audit process for ZimPost and its subsidiaries after their system crashed,” Sansole said.
The report said the effects of the Covid-19 pandemic also hindered the office of the Auditor-General from visiting the entities.
On the staffing issue, the report said: “The issue of inadequate staff also affected the process with the Nurses Council of Zimbabwe saying it has had serious staffing shortage dating back to 2014.”
“Zarnet, in its submissions, indicated that their salaries were uncompetitive leading to skills flight and brain drain. Because of these operational challenges the entity restructured the Finance and Administration Department in 2016, thereby reducing the staff complement from six to two.”
The report said the National Libraries and Documentation Centre submitted that it did not have an accountant and its books of accounts were done by a mere librarian, which the Auditor-General said not the correct practice.
“ZBC also complained of staff turnover
in the finance section due to poor working conditions. There was also a retrenchment exercise in 2014 which affected the Finance Department significantly and the preparation of financial statements.”
Some of the state-owned enterprises have been operating without boards of directors, with the Mining Promotion Corporation saying it failed to submit audited statements on time because it did not have a substantive board and was reporting to the permanent secretary in the ministry of Mines and Mining Development.
The hyperinflationary environment was also blamed for the failure by state enterprises to submit financial accounts.
“State-owned enterprises blamed the hyper-inflationary accounting in their delay in submitting their financial statements. The Chief Elections Officer of the Zimbabwe Electoral Commission (Zec) informed the Committee that the institution prepares its financial statements using international financial standards. He further explained that Zec has never missed the deadline of submission before.”
“ZimStat also submitted to the Committee that the hyper-inflation accounting was responsible for their delay in submitting financial statements.”
“The Zimbabwe Media Commission had further attributed their delay in submitting financial accounts to the need to report accounts in a hyperinflation economy.”
Others also blamed the delay on the introduction of new currencies while others said most state-owned enterprises do not have adequate information communication technology infrastructure, considering that the government was embracing e-governance in its operations model in the Covid-19 era.
“The use of multicurrency in the country was making it hard for some organisations to record the actual amounts as their accounting systems, that is Sage Pastel Evolution system Version 7 database for accounting did not have the foreign currency module to enable multiple currency conversions to the reporting currency.”
The committee recommended that state-owned enterprises invest in technological gadgets “so that people can work off-site by December 2023.”
“There is need for enhanced data protection, storage and back-up in all State-owned enterprises to avoid the situation of losing data when systems collapse by October 2022.”
“Where the Auditor-General’s office failed to conduct audits due to Covid-19 restrictions, this should be brought to the attention of the Committee so that the entities are not blamed for the delay.”
Dzivaresekwa MP Edwin Mushoriwa said: “The Public Finance Management model is meant to make sure that there is accountability and transparency in the handling of public funds. This is the reason why your Committee, Madam Speaker, was so disappointed to find out that a number of state entities and commissions have decided or failed or neglected to submit their financial statements to the Auditor-General.”
“Some of the entities go as far as 10 years without submitting financial statements for the AG to audit there. What that means is that when financial statements are not audited for such a long period of time, there is danger that there is misappropriation of funds. There is also danger that the objectives of that entity are not being accomplished and at the expense of the general populace of this country.”
“You look at companies like the National Aircraft, the National Library, you will realise that these entities have actually become obsolete in the sense that they are not performing to the dictates that they were established for.”
He highlighted the was need for PAC and other committees to demand that each and every line ministry give a report or status pertaining to the performance of parastatals under them.
Gweru Urban MP Brian Dube said those institutions failing to present their financial statements were acting unlawfully.
“Parliament is unable to oversee these institutions because the finances have not been presented and availed for purposes of making sure that Parliament can follow if they are doing things the right way,” he said.
“I will tell you that an unpatriotic person is a person who does not submit themselves to audit. All the CEOs and board members as well as ministries under whom the audit statement has not been presented are very unpatriotic.”
