News / National
MDC Alliance council's grand corruption, shady deals exposed
23 Sep 2018 at 10:20hrs | Views
Corruption and bad governance are rife at Gweru City Council (GCC) and its management has no problem admitting that, albeit behind closed doors.
This publication, working in collaboration with Information for Development Trust (IDT), a non-profit media advocacy organisation, has unearthed numerous cases of corruption at the local authority that stretch back to more than a decade ago and remain unresolved.
The local authority's last five-year strategic plan adopted in late 2017 acknowledges on page 17 of the 72-page document that it suffers many weaknesses, among them "dishonesty and corruption", a "poor working culture", "uncreditworthiness" and overstaffing.
A storm is brewing over the clandestine and unprocedural sale of the Kudzanayi bus terminus, one of Zimbabwe's biggest long-distance stations that was established well before independence in 1980.
The 1,85-hectare station was sold to a Harare private firm, Polipena Investments (Pvt) Limited, for Z$100 million (US$120 million) in 2004, but has not been handed over because the company did not have the money to develop a planned mall.
However, there are indications that construction of the mall may start soon, yet GCC does not have an alternative place to establish a terminus.
While the sale of the bustling terminus, which has been providing sources of income to vendors and the municipality over the decades, was recently made public by the media, investigations revealed that the deal was done without carrying out mandatory stakeholder consultations, nor did the council issue public notices through the media as required.
Lovemore Reketayi, the chairperson of the Gweru Vendors' Association, told The Standard that his grouping's membership only became aware of the sale this year — 14 years after.
"We were never consulted. My membership only became aware of that transaction through the grapevine this year," said Reketayi, who confronted council management and got confirmation of the transaction.
"This (Kudzanayi ) is a public property and we were supposed to have been given the first right of refusal.
"The fact that it was secretly sold to a company from out of town makes the deal suspect and raises fears that some improper influence may have played out."
Both management and councillors have been fingered in the festering corruption at the municipality, the country's third biggest.
A study carried out by an academic researcher and development expert, Didymus Dewa, shows that the director of finance, Edgar Mwedzi, in 2011 authorised the sale of a Mazda B2200 with council fleet number TC5 and registration number 561-511M at a book price of only $7 to one of the councillors.
Mwedzi referred all questions to the council spokesperson, Manford Gambiza.
The sale was supposed to be done through a public auction as indicated in an advertisement that was flighted in the weekend edition of the Chronicle of February 5 the same year, but there are no records to show that it was open to all and sundry.
A voluminous report that was produced by the council's audit committee in 2013 and backed by RTGS transfers and pro forma invoices shows that the council's management may have made several fraudulent purchases by inflating prices.
The committee that was chaired by Moses Marecha, one of the councillors, indicated that there was no transparency in the purchase of two Toyota Hilux vehicles from Willowvale Mazda Motor Industries (WMMI), a carcass- splitting machine for the city's abattoirs and the installation of traffic lights.
The document revealed that the Hilux vehicles were bought from Toyota Gweru at a cost of $73 450 each after the finance department raised payment voucher number 41309 on April 3, 2013 with a sum of $146 900.
The payment was effected through a bank transfer to Toyota Gweru CBZ Kwame Nkrumah branch via account number 011 233 799 90029.
However, the audit committee discovered that the council buyer only identified as Mutinha, who directed the purchase had quoted the price at $135 000 through purchase order number 14850 dated March 11, 2018, giving a variance of $11 000.
More confusion followed when the committee members physically visited the Toyota branch in Gweru during their investigations.
They asked for and obtained a quotation, which indicated that the two vehicles cost $127 510 yet there had not been a drop in prices.
According to the audit team, council bought five more vehicles despite the fact that the then State Procurement Board was not involved as required.
These vehicles, which were also bought from WVMMI, cost $50 000 more than at another reputable car dealer, Quest Motors.
The audit committee made shocking discoveries relating to the installation of 11 solar traffic lights in Gweru.
The installation was made by a company identified as Emobuild Construction (Pvt) Limited situated at stand number 8330 in Mtapa.
Council paid $33 728 for each traffic light, but investigations by the committee showed that a single installation was supposed to cost $19 063.
"On the bill of quantity contained in the contract agreement at council, we had been dismayed how it could be claimed that the company would use 16 cubic metres of river sand, 16 cubic metres of quarry stones on a single traffic light and buy protective clothing, picks, shovels and pay salaries of $3 314,46 for the same single robot," reads part of the audit report.
The council bought the carcass- splitting machine from Industrial Tools and Equipment, which was represented by one T Maposa.
The purchase was done at a cost of $14 000 under direct purchase order number 148130 that The Standard has in its possession.
The payment was made in two batches, the first one having been done on January 28, 2013 under payment voucher number 1301144. The balance of $5 600 was paid on February 21.
The audit team discovered that the supplier had given a false address, and Maposa, according to his named ex-wife, had long left Zimbabwe for Mozambique when the purchase was made and had never dealt in such machinery.
An inquiry with an established company based in Bulawayo revealed that a bigger machine cost only $1 990.
"The above scenario shows how massively council was swindled of hard cash through corrupt deals," the audit report reads. This report was presented in a full council meeting, but no action has been taken.
The GCC has been spending too much on a bloated workforce, always breaching the salary-services ratio, which stipulates that councils must not spend more than 30% of their allocated budgets on wages, as regulated by central government in 2015.
In 2016 the local authority's employment expenditure costs gobbled 44,38% of the annual income and the figure rose to 66,3% last year.
In 2016, indirect salaries and allowances claimed $5 311 783. Direct salaries and allowances took $9 443 171, while negligible amounts went to infrastructure and other services.
According to the minutes of a confidential finance committee meeting held on May 16, the council is operating with 21 bank accounts whose ledgers have not been reconciled since 2013.
Part of the report reads: "It must be appreciated that council has 21 bank accounts which need to be reconciled… Our cash book reconciliations had outstanding reconciling items going as far back as 2013, and this has been highlighted by our External Auditors for the years 2013 and 2014."
Damning minutes of the audit committee meeting held on November 9, 2017 and chaired by Simon Chapukira raised a red flag over suspected fraud and lack of transparency among council employees working in the revenue hall.
"Audit picked from the corporate bank statement that there were 26 RTGSs amounting to $15 024,54 and 13 RTGS amounting to $7 516, 11 transferred by clients to Gweru City Council rates and water accounts respectively, during the month of January 2017, which were not yet receipted at the time of audit (May 2017).
"Audit observed in some instances for the month of January 2017 where cashiers at Town House did not attach to their cash-up forms copies of RTGS. Receipted RTGS amounts should have their forms attached to cash-up forms to enable verification of such receipted amounts," read the minutes.
The audit noted that such occurrences would make verifications unable to track the receipted RTGs amounts to actual payments made as shown in bank statements.
The audit committee concluded that there was "potential risk that council could be exposed to fraud risk".
The committee also raised concern over unaudited council financial books and gave evidence on how the council was being prejudiced ostensibly by named council employees in the finance department.
"Audit observed that council's bank reconciliations, which should be done on a monthly basis as a management tool, were last done in 2014, such that the finance department could not pick up some problems which arise due to POS (point-of-sale) reversals.
Sources at the council also revealed that the procurement committee, which is chaired by the town clerk, Elizabeth Gwatipedza, approved a tender of $30 000 for the supply of curtains to furnish the mayoral mansion that she intended to occupy after transferring from the Redcliff municipality in Kwekwe.
Inside sources said the figure was too high for the mansion despite the fact that it is three-storeyed and has several bedrooms, a common room, living room, a study, two kitchens and several toilets.
"Even for Midlands Hotel, which is far much bigger, such an amount is just too high for curtains only," said a source.
This adds to the allocation of $3 million this year for a workforce evaluation reportedly at the insistence of the town clerk, with insiders describing it as "dubious and extravagant" at a time the municipality was struggling to raise revenue.
The evaluation went ahead despite council's failure to honour the recommendations of a previous one that noted that the workforce was bloated and a mismatch between qualifications and jobs, with nurses found to be working in the engineering department.
Private and confidential minutes of the procurement committee led by Gwatipedza on Wednesday October 4, 2017 indicate that a total of five companies — Release Power Investment (Pvt), Bitumen World, tensor Systems, Tencraft Construction and Drawcard Enterprises — were short-listed for the tender.
However, while on average three of the companies charged $1,5 million for the job, the committee went on to award Bitumen World the tender at a charge of $2 264 097.
Charles Mazorodze, the chairperson of Gweru Residents' Forum, in an audio recording availed to The Standard, said he was aware of corrupt activities at the council. He said it was worrisome management was unwilling to attend to the concerns.
In responses to the corruption issues, Gambiza, the council spokesperson, skirted some questions like the issue of a car bought for $7, saying the resolution was contained in manual format and so it was difficult to trace it for purposes of commenting as it happened long back.
He confirmed sale of the Kudzanayi bus terminus, but insisted it was done above board, saying there was "no need for alarm from our motoring public and other key stakeholders in and around Kudzanayi rank".
He also defended issuing of the tender to Bitumen World and overlooking cheaper companies.
"You should appreciate that the value of a tender is not limited to the cost only. We consider capacity to deliver, past experience with us as an organisation, registration with statutory bodies, certificate of incorporation, traceable references, capacity to supply and scope of work, among other requirements," he said.
He could not be drawn to comment on how the other competing companies fared in all these parameters.
He dismissed the claim that council had bought curtains for the mayoral mansion for $30 000 and insisted that there was nothing wrong with operating 21 bank accounts.
"Opening of bank accounts is provided for in the Urban Councils Act and each and every account council would want opened has a resolution and whatever number of accounts opened will be above board.
"The issue of these accounts having not been reconciled is besides the point because there are monthly management accounts reports that are prepared and presented to council," he said.
The spokesperson also said that "council is aware of the 30/70 ratio and efforts have been and are being made to reach the desired levels".
Local government permanent secretary George Magosvonge did not pick up his mobile phone when sought for comment several times and did not respond to a text message sent to him.
Local government minister July Moyo was unavailable for comment when sought on several occasions.
This publication, working in collaboration with Information for Development Trust (IDT), a non-profit media advocacy organisation, has unearthed numerous cases of corruption at the local authority that stretch back to more than a decade ago and remain unresolved.
The local authority's last five-year strategic plan adopted in late 2017 acknowledges on page 17 of the 72-page document that it suffers many weaknesses, among them "dishonesty and corruption", a "poor working culture", "uncreditworthiness" and overstaffing.
A storm is brewing over the clandestine and unprocedural sale of the Kudzanayi bus terminus, one of Zimbabwe's biggest long-distance stations that was established well before independence in 1980.
The 1,85-hectare station was sold to a Harare private firm, Polipena Investments (Pvt) Limited, for Z$100 million (US$120 million) in 2004, but has not been handed over because the company did not have the money to develop a planned mall.
However, there are indications that construction of the mall may start soon, yet GCC does not have an alternative place to establish a terminus.
While the sale of the bustling terminus, which has been providing sources of income to vendors and the municipality over the decades, was recently made public by the media, investigations revealed that the deal was done without carrying out mandatory stakeholder consultations, nor did the council issue public notices through the media as required.
Lovemore Reketayi, the chairperson of the Gweru Vendors' Association, told The Standard that his grouping's membership only became aware of the sale this year — 14 years after.
"We were never consulted. My membership only became aware of that transaction through the grapevine this year," said Reketayi, who confronted council management and got confirmation of the transaction.
"This (Kudzanayi ) is a public property and we were supposed to have been given the first right of refusal.
"The fact that it was secretly sold to a company from out of town makes the deal suspect and raises fears that some improper influence may have played out."
Both management and councillors have been fingered in the festering corruption at the municipality, the country's third biggest.
A study carried out by an academic researcher and development expert, Didymus Dewa, shows that the director of finance, Edgar Mwedzi, in 2011 authorised the sale of a Mazda B2200 with council fleet number TC5 and registration number 561-511M at a book price of only $7 to one of the councillors.
Mwedzi referred all questions to the council spokesperson, Manford Gambiza.
The sale was supposed to be done through a public auction as indicated in an advertisement that was flighted in the weekend edition of the Chronicle of February 5 the same year, but there are no records to show that it was open to all and sundry.
A voluminous report that was produced by the council's audit committee in 2013 and backed by RTGS transfers and pro forma invoices shows that the council's management may have made several fraudulent purchases by inflating prices.
The committee that was chaired by Moses Marecha, one of the councillors, indicated that there was no transparency in the purchase of two Toyota Hilux vehicles from Willowvale Mazda Motor Industries (WMMI), a carcass- splitting machine for the city's abattoirs and the installation of traffic lights.
The document revealed that the Hilux vehicles were bought from Toyota Gweru at a cost of $73 450 each after the finance department raised payment voucher number 41309 on April 3, 2013 with a sum of $146 900.
The payment was effected through a bank transfer to Toyota Gweru CBZ Kwame Nkrumah branch via account number 011 233 799 90029.
However, the audit committee discovered that the council buyer only identified as Mutinha, who directed the purchase had quoted the price at $135 000 through purchase order number 14850 dated March 11, 2018, giving a variance of $11 000.
More confusion followed when the committee members physically visited the Toyota branch in Gweru during their investigations.
They asked for and obtained a quotation, which indicated that the two vehicles cost $127 510 yet there had not been a drop in prices.
According to the audit team, council bought five more vehicles despite the fact that the then State Procurement Board was not involved as required.
These vehicles, which were also bought from WVMMI, cost $50 000 more than at another reputable car dealer, Quest Motors.
The audit committee made shocking discoveries relating to the installation of 11 solar traffic lights in Gweru.
The installation was made by a company identified as Emobuild Construction (Pvt) Limited situated at stand number 8330 in Mtapa.
Council paid $33 728 for each traffic light, but investigations by the committee showed that a single installation was supposed to cost $19 063.
"On the bill of quantity contained in the contract agreement at council, we had been dismayed how it could be claimed that the company would use 16 cubic metres of river sand, 16 cubic metres of quarry stones on a single traffic light and buy protective clothing, picks, shovels and pay salaries of $3 314,46 for the same single robot," reads part of the audit report.
The council bought the carcass- splitting machine from Industrial Tools and Equipment, which was represented by one T Maposa.
The purchase was done at a cost of $14 000 under direct purchase order number 148130 that The Standard has in its possession.
The payment was made in two batches, the first one having been done on January 28, 2013 under payment voucher number 1301144. The balance of $5 600 was paid on February 21.
The audit team discovered that the supplier had given a false address, and Maposa, according to his named ex-wife, had long left Zimbabwe for Mozambique when the purchase was made and had never dealt in such machinery.
An inquiry with an established company based in Bulawayo revealed that a bigger machine cost only $1 990.
"The above scenario shows how massively council was swindled of hard cash through corrupt deals," the audit report reads. This report was presented in a full council meeting, but no action has been taken.
The GCC has been spending too much on a bloated workforce, always breaching the salary-services ratio, which stipulates that councils must not spend more than 30% of their allocated budgets on wages, as regulated by central government in 2015.
In 2016 the local authority's employment expenditure costs gobbled 44,38% of the annual income and the figure rose to 66,3% last year.
In 2016, indirect salaries and allowances claimed $5 311 783. Direct salaries and allowances took $9 443 171, while negligible amounts went to infrastructure and other services.
According to the minutes of a confidential finance committee meeting held on May 16, the council is operating with 21 bank accounts whose ledgers have not been reconciled since 2013.
Part of the report reads: "It must be appreciated that council has 21 bank accounts which need to be reconciled… Our cash book reconciliations had outstanding reconciling items going as far back as 2013, and this has been highlighted by our External Auditors for the years 2013 and 2014."
Damning minutes of the audit committee meeting held on November 9, 2017 and chaired by Simon Chapukira raised a red flag over suspected fraud and lack of transparency among council employees working in the revenue hall.
"Audit picked from the corporate bank statement that there were 26 RTGSs amounting to $15 024,54 and 13 RTGS amounting to $7 516, 11 transferred by clients to Gweru City Council rates and water accounts respectively, during the month of January 2017, which were not yet receipted at the time of audit (May 2017).
"Audit observed in some instances for the month of January 2017 where cashiers at Town House did not attach to their cash-up forms copies of RTGS. Receipted RTGS amounts should have their forms attached to cash-up forms to enable verification of such receipted amounts," read the minutes.
The audit noted that such occurrences would make verifications unable to track the receipted RTGs amounts to actual payments made as shown in bank statements.
The audit committee concluded that there was "potential risk that council could be exposed to fraud risk".
The committee also raised concern over unaudited council financial books and gave evidence on how the council was being prejudiced ostensibly by named council employees in the finance department.
"Audit observed that council's bank reconciliations, which should be done on a monthly basis as a management tool, were last done in 2014, such that the finance department could not pick up some problems which arise due to POS (point-of-sale) reversals.
Sources at the council also revealed that the procurement committee, which is chaired by the town clerk, Elizabeth Gwatipedza, approved a tender of $30 000 for the supply of curtains to furnish the mayoral mansion that she intended to occupy after transferring from the Redcliff municipality in Kwekwe.
Inside sources said the figure was too high for the mansion despite the fact that it is three-storeyed and has several bedrooms, a common room, living room, a study, two kitchens and several toilets.
"Even for Midlands Hotel, which is far much bigger, such an amount is just too high for curtains only," said a source.
This adds to the allocation of $3 million this year for a workforce evaluation reportedly at the insistence of the town clerk, with insiders describing it as "dubious and extravagant" at a time the municipality was struggling to raise revenue.
The evaluation went ahead despite council's failure to honour the recommendations of a previous one that noted that the workforce was bloated and a mismatch between qualifications and jobs, with nurses found to be working in the engineering department.
Private and confidential minutes of the procurement committee led by Gwatipedza on Wednesday October 4, 2017 indicate that a total of five companies — Release Power Investment (Pvt), Bitumen World, tensor Systems, Tencraft Construction and Drawcard Enterprises — were short-listed for the tender.
However, while on average three of the companies charged $1,5 million for the job, the committee went on to award Bitumen World the tender at a charge of $2 264 097.
Charles Mazorodze, the chairperson of Gweru Residents' Forum, in an audio recording availed to The Standard, said he was aware of corrupt activities at the council. He said it was worrisome management was unwilling to attend to the concerns.
In responses to the corruption issues, Gambiza, the council spokesperson, skirted some questions like the issue of a car bought for $7, saying the resolution was contained in manual format and so it was difficult to trace it for purposes of commenting as it happened long back.
He confirmed sale of the Kudzanayi bus terminus, but insisted it was done above board, saying there was "no need for alarm from our motoring public and other key stakeholders in and around Kudzanayi rank".
He also defended issuing of the tender to Bitumen World and overlooking cheaper companies.
"You should appreciate that the value of a tender is not limited to the cost only. We consider capacity to deliver, past experience with us as an organisation, registration with statutory bodies, certificate of incorporation, traceable references, capacity to supply and scope of work, among other requirements," he said.
He could not be drawn to comment on how the other competing companies fared in all these parameters.
He dismissed the claim that council had bought curtains for the mayoral mansion for $30 000 and insisted that there was nothing wrong with operating 21 bank accounts.
"Opening of bank accounts is provided for in the Urban Councils Act and each and every account council would want opened has a resolution and whatever number of accounts opened will be above board.
"The issue of these accounts having not been reconciled is besides the point because there are monthly management accounts reports that are prepared and presented to council," he said.
The spokesperson also said that "council is aware of the 30/70 ratio and efforts have been and are being made to reach the desired levels".
Local government permanent secretary George Magosvonge did not pick up his mobile phone when sought for comment several times and did not respond to a text message sent to him.
Local government minister July Moyo was unavailable for comment when sought on several occasions.
Source - the standard
