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Treasury officials under fire over undocumented loans

by Staff reporter
27 Aug 2019 at 07:33hrs | Views
Ministry of Finance and Economic Development officials were yesterday taken to task for loaning unnamed parastatals US$68 million without supporting vouchers and with no hope of recovering the money.

Giving oral evidence before Parliament's Public Accounts Committee, senior officials from the ministry admitted to extending financial assistance to local authorities and State enterprises knowing that "the possibility of recovering the funds is very limited".

So heated was the meeting that Public Accounts Committee chairperson Tendai Biti had an altercation with Ministry of Finance and Economic Development chief principal director Mr Zvinechimwe Ruvinga Churu.

Mr Churu, who was blasted by the committee for not exercising due diligence, said Treasury intervened in times of crisis in order to bail out councils and parastatals.

"It's true that we lent resources to local authorities and our public enterprises. In many cases we lend these resources when they are facing emergencies. When they are broke, and most of them are actually broke. Initially, the whole idea is that we deal with the crisis. We then think about should we convert this to a loan or should we just leave it as a payment from the budget?

"In many cases we leave this as appropriations on the basis that we know that the possibility of recovering the funds is very limited," he said.

Mr Biti immediately hit back saying: "That is not our question, our question is on supporting documents. Why would you give US$68 million without supporting documents, without vouchers. In other words, how do you prove authenticity?"

Ministry of Finance and Economic Development accountant-general Mr Daniel Muchemwa raised the ire of the committee when he failed to explain why there were no supporting documents for loaned funds.

"I have no answer Mr Chairman," Mr Muchemwa said.

In her recent report, Auditor-General Mrs Mildred Chiri found that Treasury advanced US$68 million to parastatals but there were no supporting documents The Public Accounts Committee also heard that Treasury paid over US$400 million to a company called FCG on the pretext that it supplied fertilisers for Command Agriculture but officials did not know where the company was or who owned it. FCG did not even go to tender.

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Source - the herald