News / Local
Mines ministry financial accounts in shambles
08 Apr 2022 at 12:11hrs | Views
THE Auditor-General's (AG) office has redflagged the ministry of Mines and Mining Development's financial accounts citing a possible understatement of an amount disclosed as public financial assets.
According to the AG's 2020 report, the Mines and Mining Development ministry failed to produce an accurate return on public financial assets, which might indicate misuse of funds.
The opening balance of ZW$630 656 405 (US$4,3 million) as of January 1, 2020, was different from the closing balance of ZW$104 386 597 (US$700 000) as of December 31, 2019.
"There was no explanation on why there was a variance of ZW$526 269 808 (US$3,6 million)," AG Mildred Chiri said in the financial year ended December 2020 report.
Chiri stated that the funds that were unaccounted for are public funds that should benefit the country.
In addition, the reconciliation of funds used in line with the Hwange Colliery investment was reported to be still pending at the time of the audit. According to the AG, the reconciliation of the Hwange Colliery is underway and the ministry had based its return on the information supplied by the coal miner with corrective measures to be taken. The report noted that the ministry had made progress in addressing the audit's findings for the previous year (2019) in the collection of outstanding revenue as seen in the decreased numbers to ZW$166 457 861 (US$1,1 million) as at December 2020 from $257 927 409 (US$1,8 million) in 2019.
The ministry's loan fund meant to promote the production of minerals was noted in the report to have been presented fairly with its financial performance and its cash flows for the year recorded in accordance with Generally Accepted Accounting Practice (GAAP).
The report further noted that the omission of some transactions in the Public Finance Management System (PFMS) was another overor understatement of expenditure resulting in misstatements in the financial statements. "The ministry should reconcile the differences and ensure that all expenditure is captured," Chiri advised.
During the year under review, the Mining Industry Loan Fund had account receivables for plant and equipment hiring amounting to ZW$228 501 (US$1 600) although the loan for the plant expired as far back as 2012 to 2015.
The plant and equipment had not been collected from the debtors despite that the loan period had expired.
"Out of the total debt ZW$114 175 (US$800) was for debtors who had returned the plant and equipment, and ZW$114 326 (US$800) for the plant and equipment was still to be collected since the loan period had expired. There was no evidence that the fund management issued reminders and follow up letters to clients," Chiri said.
The Auditor-General recommended that the ministry should use debt recovery strategies such as sending reminders to clients to get back plants from debtors, who are still in possession of the equipment.
The Mines and Mining Development ministry, Chiri added, should seek treasury authority to write-off some of the long-standing debts that have proved to be irrecoverable.
According to the AG's 2020 report, the Mines and Mining Development ministry failed to produce an accurate return on public financial assets, which might indicate misuse of funds.
The opening balance of ZW$630 656 405 (US$4,3 million) as of January 1, 2020, was different from the closing balance of ZW$104 386 597 (US$700 000) as of December 31, 2019.
"There was no explanation on why there was a variance of ZW$526 269 808 (US$3,6 million)," AG Mildred Chiri said in the financial year ended December 2020 report.
Chiri stated that the funds that were unaccounted for are public funds that should benefit the country.
In addition, the reconciliation of funds used in line with the Hwange Colliery investment was reported to be still pending at the time of the audit. According to the AG, the reconciliation of the Hwange Colliery is underway and the ministry had based its return on the information supplied by the coal miner with corrective measures to be taken. The report noted that the ministry had made progress in addressing the audit's findings for the previous year (2019) in the collection of outstanding revenue as seen in the decreased numbers to ZW$166 457 861 (US$1,1 million) as at December 2020 from $257 927 409 (US$1,8 million) in 2019.
The ministry's loan fund meant to promote the production of minerals was noted in the report to have been presented fairly with its financial performance and its cash flows for the year recorded in accordance with Generally Accepted Accounting Practice (GAAP).
The report further noted that the omission of some transactions in the Public Finance Management System (PFMS) was another overor understatement of expenditure resulting in misstatements in the financial statements. "The ministry should reconcile the differences and ensure that all expenditure is captured," Chiri advised.
During the year under review, the Mining Industry Loan Fund had account receivables for plant and equipment hiring amounting to ZW$228 501 (US$1 600) although the loan for the plant expired as far back as 2012 to 2015.
The plant and equipment had not been collected from the debtors despite that the loan period had expired.
"Out of the total debt ZW$114 175 (US$800) was for debtors who had returned the plant and equipment, and ZW$114 326 (US$800) for the plant and equipment was still to be collected since the loan period had expired. There was no evidence that the fund management issued reminders and follow up letters to clients," Chiri said.
The Auditor-General recommended that the ministry should use debt recovery strategies such as sending reminders to clients to get back plants from debtors, who are still in possession of the equipment.
The Mines and Mining Development ministry, Chiri added, should seek treasury authority to write-off some of the long-standing debts that have proved to be irrecoverable.
Source - the independent
