News / Local
Govt loses millions of dollars in vehicle scandal - Report
09 Apr 2022 at 06:16hrs | Views
A VEHICLE scam has hit the government, with several ministries, including Information and Justice, spending millions of dollars in purchasing vehicles that were not delivered, in a development that exposes gross corruption within the regime.
Millions of dollars were used since 2015 to 2019 to buy vehicles for government ministries, but it emerged the most of the cars were not delivered, while others were not registered and open to abuse by senior officials.
Those delivered were often bought at inflated prices, with the government paying way beyond the quoted prices.
In her Appropriation Accounts, Finance and Revenue Statements and Fund Accounts, for the year ended 2020, Auditor-General Mildred Chiri revealed that the ministry of Information bought 29 vehicles, but only received five.
By the time of the audit, the rest of the vehicles were yet to be delivered.
"According to the General Conditions of Contract (GCC) 19.1 of the Contract of Sale entered into between the Ministry and Vehicle suppliers during 2020, the date for completion of the delivery of vehicles or the period within which the delivery was expected to be done was four weeks from the date of issue of the purchase order," reads the audit report in part.
"Audit noted that on June 3, 2021, the Ministry had not yet taken delivery of a total of 24 out of 29 vehicles paid for to Solution Motors (7) and Motor City (17) despite that the dates for completion of delivery of vehicles agreed in the contract of sale with both suppliers lapsed on October 23, 2020."
The Auditor-General raised fears that the purchased vehicles may be concealed if delivery takes too long.
The issue of vehicles is also haunting the ministry of National Housing which bought nine new vehicles but received only six by the time of the audit, raising fears that some government officials may be colluding with suppliers to siphon money from state coffers.
Chiri also found that there was a price variation between what was paid by the government and the contract value, which was in contravention of the General Conditions of Contract 29.1 of the Contact of Sale signed between the ministry of Information and four vehicle suppliers in 2020.
The contract states that any variation of the contract that may be as a result of changes in statutory requirements, macro-economic environment or a shift in government policies should be agreed to by both parties through an addendum to the contract. This was not done.
In case the addendum is added, the agreement states that the price adjustment would only be allowed after 60 days "and the increase shall not exceed 20%."
"I noted that the Ministry paid an amount of ZW28 334 774 (149%) above the contract value of ZW$19 044 519 for the supply of 12 vehicles. The Ministry paid a further amount of ZW$26 047 176 (82%) above the contract value of ZW$31 573 531 for the supply of other 17 vehicles," observed Chiri.
"Both payments were made on September 25, 2020 after the lapse of 60 days. There was no evidence availed to audit in the form of an addendum to the contract with details justifying the increase in excess of the 20% allowed in the contract."
Chiri said there was a risk of wasteful expenditure or fraud being committed.
She recommended that the excess payment be recovered and said the ministry should pay as per the contractual agreements to ensure effective use of public funds.
It also emerged that the ministry of Youth, Sport, Arts and Culture also bought 14 vehicles valued at $617 863 in 2017 from Canon Motors but two Nissan NP 300 single cab motor vehicles are yet to be delivered. No explanation was given.
In 2020, the ministry of Justice, Legal and Parliamentary Affairs also bought 14 vehicles for $17 140 759, but three of those were yet to be delivered.
"I was not furnished with explanations as to why the vehicles remained undelivered and there was no evidence of follow-up with the supplier on the outstanding vehicles," Chiri said.
The Auditor-General also noted that the Chiefs Council has failed to address the contentious issue raised in the previous audit in which vehicles were paid at a hugely inflated price.
"The issue of four vehicles bought at a cost of US$499 999 instead of US$202 000 had not been addressed," the audit reads.
Vehicles bought for the Industrial Training and Trade Testing Fund 2018 under the ministry of Higher and Tertiary Education remain unaccounted for, with one, a Toyota Landcruiser, bought in 2015 for $100 449, vanishing.
A Toyota Hilux 310 D4D acquired in 2016 was allocated to a senior official who took it to the Zimbabwe Manpower Development Fund and it is yet to be returned.
The vehicle saga has confirmed suspicions of gross corruption, theft and lack of transparency in government departments as it also emerged that besides vehicles, many public assets have not been accounted for.
Millions of dollars were used since 2015 to 2019 to buy vehicles for government ministries, but it emerged the most of the cars were not delivered, while others were not registered and open to abuse by senior officials.
Those delivered were often bought at inflated prices, with the government paying way beyond the quoted prices.
In her Appropriation Accounts, Finance and Revenue Statements and Fund Accounts, for the year ended 2020, Auditor-General Mildred Chiri revealed that the ministry of Information bought 29 vehicles, but only received five.
By the time of the audit, the rest of the vehicles were yet to be delivered.
"According to the General Conditions of Contract (GCC) 19.1 of the Contract of Sale entered into between the Ministry and Vehicle suppliers during 2020, the date for completion of the delivery of vehicles or the period within which the delivery was expected to be done was four weeks from the date of issue of the purchase order," reads the audit report in part.
"Audit noted that on June 3, 2021, the Ministry had not yet taken delivery of a total of 24 out of 29 vehicles paid for to Solution Motors (7) and Motor City (17) despite that the dates for completion of delivery of vehicles agreed in the contract of sale with both suppliers lapsed on October 23, 2020."
The Auditor-General raised fears that the purchased vehicles may be concealed if delivery takes too long.
The issue of vehicles is also haunting the ministry of National Housing which bought nine new vehicles but received only six by the time of the audit, raising fears that some government officials may be colluding with suppliers to siphon money from state coffers.
Chiri also found that there was a price variation between what was paid by the government and the contract value, which was in contravention of the General Conditions of Contract 29.1 of the Contact of Sale signed between the ministry of Information and four vehicle suppliers in 2020.
The contract states that any variation of the contract that may be as a result of changes in statutory requirements, macro-economic environment or a shift in government policies should be agreed to by both parties through an addendum to the contract. This was not done.
In case the addendum is added, the agreement states that the price adjustment would only be allowed after 60 days "and the increase shall not exceed 20%."
"I noted that the Ministry paid an amount of ZW28 334 774 (149%) above the contract value of ZW$19 044 519 for the supply of 12 vehicles. The Ministry paid a further amount of ZW$26 047 176 (82%) above the contract value of ZW$31 573 531 for the supply of other 17 vehicles," observed Chiri.
"Both payments were made on September 25, 2020 after the lapse of 60 days. There was no evidence availed to audit in the form of an addendum to the contract with details justifying the increase in excess of the 20% allowed in the contract."
Chiri said there was a risk of wasteful expenditure or fraud being committed.
She recommended that the excess payment be recovered and said the ministry should pay as per the contractual agreements to ensure effective use of public funds.
It also emerged that the ministry of Youth, Sport, Arts and Culture also bought 14 vehicles valued at $617 863 in 2017 from Canon Motors but two Nissan NP 300 single cab motor vehicles are yet to be delivered. No explanation was given.
In 2020, the ministry of Justice, Legal and Parliamentary Affairs also bought 14 vehicles for $17 140 759, but three of those were yet to be delivered.
"I was not furnished with explanations as to why the vehicles remained undelivered and there was no evidence of follow-up with the supplier on the outstanding vehicles," Chiri said.
The Auditor-General also noted that the Chiefs Council has failed to address the contentious issue raised in the previous audit in which vehicles were paid at a hugely inflated price.
"The issue of four vehicles bought at a cost of US$499 999 instead of US$202 000 had not been addressed," the audit reads.
Vehicles bought for the Industrial Training and Trade Testing Fund 2018 under the ministry of Higher and Tertiary Education remain unaccounted for, with one, a Toyota Landcruiser, bought in 2015 for $100 449, vanishing.
A Toyota Hilux 310 D4D acquired in 2016 was allocated to a senior official who took it to the Zimbabwe Manpower Development Fund and it is yet to be returned.
The vehicle saga has confirmed suspicions of gross corruption, theft and lack of transparency in government departments as it also emerged that besides vehicles, many public assets have not been accounted for.
Source - NewsHawks
