News / National
'Councils pay for undelivered goods'
26 Sep 2022 at 05:54hrs | Views
MOST local authorities have yet to submit last year's accounts for audit, with only 21 of the 92 having done so by the end of the May deadline, the Auditor-General, Mrs Mildred Chiri, has said.
She said of these, more than half had governance issues including paying for goods and services that were never delivered, weakening payroll management systems, non-compliance with recruitment, and deliberate attempts to circumvent procurement rules.
In her report to Parliament on local authority accounts for last year, Mrs Chiri said governance issues jumped from 42 percent of councils in 2020 to 53 percent last year.
The report was tabled in Parliament last week with Mrs Chiri saying the governance issues were those she has perennially reported on and these include absence of key policies, non-compliance with laws and other regulatory provisions, poor contract management and mismanagement of assets.
She said the 71 councils who had not submitted accounts suffered delays partly due to the effects of disruptions caused by Covid-19.
"Governance issues dominated major findings as there was a 11 percent increase from 2020 (42 percent) to 2021 (53 percent) and the same have remained high in all my reports over the last five years. Employment issues surged from 8 percent in 2020 to 15 percent in 2021 thus showing signs of weakening payroll management systems and non-compliance with recruitment policies and procedures," Mrs Chiri said.
The number of reported service delivery issues has been rising over the years, with a 13 percent increase witnessed from 2020 to 2021.
"It is my concern to note an increase in such issues against the backdrop of Inter-Governmental Transfer released to local authorities towards financing of service delivery capital projects," she said, referring to the devolution agenda and the funds released to local authorities.
Mrs Chiri said a notable improvement was on the reduction in findings on revenue collection, management and debt recovery issues with a 20 percent reduction from 26 percent to six percent in 2021.
Examples of breaches of rules and regulations she cited in her summary include Redcliff Municipality which irregularly bought cars and equipment worth US$847 962, through a swap of 21 hectares of land with a chrome processing company.
Mutare City Council circumvented procurement procedures by buying four second hand cars through its subsidiary, Pungwe Breweries (Pvt) Limited. The council had not been preparing consolidated financial statements despite owning the subsidiary 100 percent.
"A number of local authorities made advance payments for goods which were not delivered. Marondera Municipality made an advance payment for the purchase of 20 drums of catmix and only 8 drums were delivered," Mrs Chiri said.
"Karoi Town Council paid US$109 000 for the supply of a refuse compactor truck in 2018 which was yet to be delivered. Marondera RDC also paid suppliers of a tipper truck and a tractor backhoe loader in full and has not taken delivery of the equipment.
"Marondera Municipality and Karoi Town Council entered into agreements with third parties for the provision of traffic management systems among others."
Two cars belonging to Matobo RDC were sent for repairs to a local company in 2007, but 14 years later, the vehicles had not been returned while Mwenezi RDC received a donation of 16 411kg of game meat from a local conservancy which was sold for ZWL$93 418 but this was not accounted for as required in the donation conditions.
"In addition, fuel benefits for heads of departments were being processed outside the payroll thereby not being subjected to tax.
"In my report, common findings cutting across most local authorities were in respect of unsupported expenditure, valuation of assets and failure to account for infrastructure assets, land reserves and stands inventory in the financial statements," Mrs Chiri said.
On the implementation of recommendations she made in previous reports, the AG said out of 141 findings reported in 2020, nine were fully addressed, 23 were not addressed, 80 were being followed up with audits in progress, while 29 were yet to be followed up because financial statements had not been submitted for audit at the time of concluding the report.
She said of these, more than half had governance issues including paying for goods and services that were never delivered, weakening payroll management systems, non-compliance with recruitment, and deliberate attempts to circumvent procurement rules.
In her report to Parliament on local authority accounts for last year, Mrs Chiri said governance issues jumped from 42 percent of councils in 2020 to 53 percent last year.
The report was tabled in Parliament last week with Mrs Chiri saying the governance issues were those she has perennially reported on and these include absence of key policies, non-compliance with laws and other regulatory provisions, poor contract management and mismanagement of assets.
She said the 71 councils who had not submitted accounts suffered delays partly due to the effects of disruptions caused by Covid-19.
"Governance issues dominated major findings as there was a 11 percent increase from 2020 (42 percent) to 2021 (53 percent) and the same have remained high in all my reports over the last five years. Employment issues surged from 8 percent in 2020 to 15 percent in 2021 thus showing signs of weakening payroll management systems and non-compliance with recruitment policies and procedures," Mrs Chiri said.
The number of reported service delivery issues has been rising over the years, with a 13 percent increase witnessed from 2020 to 2021.
"It is my concern to note an increase in such issues against the backdrop of Inter-Governmental Transfer released to local authorities towards financing of service delivery capital projects," she said, referring to the devolution agenda and the funds released to local authorities.
Mrs Chiri said a notable improvement was on the reduction in findings on revenue collection, management and debt recovery issues with a 20 percent reduction from 26 percent to six percent in 2021.
Examples of breaches of rules and regulations she cited in her summary include Redcliff Municipality which irregularly bought cars and equipment worth US$847 962, through a swap of 21 hectares of land with a chrome processing company.
Mutare City Council circumvented procurement procedures by buying four second hand cars through its subsidiary, Pungwe Breweries (Pvt) Limited. The council had not been preparing consolidated financial statements despite owning the subsidiary 100 percent.
"A number of local authorities made advance payments for goods which were not delivered. Marondera Municipality made an advance payment for the purchase of 20 drums of catmix and only 8 drums were delivered," Mrs Chiri said.
"Karoi Town Council paid US$109 000 for the supply of a refuse compactor truck in 2018 which was yet to be delivered. Marondera RDC also paid suppliers of a tipper truck and a tractor backhoe loader in full and has not taken delivery of the equipment.
"Marondera Municipality and Karoi Town Council entered into agreements with third parties for the provision of traffic management systems among others."
Two cars belonging to Matobo RDC were sent for repairs to a local company in 2007, but 14 years later, the vehicles had not been returned while Mwenezi RDC received a donation of 16 411kg of game meat from a local conservancy which was sold for ZWL$93 418 but this was not accounted for as required in the donation conditions.
"In addition, fuel benefits for heads of departments were being processed outside the payroll thereby not being subjected to tax.
"In my report, common findings cutting across most local authorities were in respect of unsupported expenditure, valuation of assets and failure to account for infrastructure assets, land reserves and stands inventory in the financial statements," Mrs Chiri said.
On the implementation of recommendations she made in previous reports, the AG said out of 141 findings reported in 2020, nine were fully addressed, 23 were not addressed, 80 were being followed up with audits in progress, while 29 were yet to be followed up because financial statements had not been submitted for audit at the time of concluding the report.
Source - The Herald
