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Auditor General flags deep financial mismanagement at CAAZ
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The Auditor General has raised serious concerns over financial mismanagement and poor governance at the Civil Aviation Authority of Zimbabwe (CAAZ), warning that the parastatal is burdened by legacy debt and faces a critical threat to its viability.
A report tabled in Parliament by the Public Accounts Committee (PAC) revealed that CAAZ's internal financial controls—particularly concerning the management of cash and bank balances—were grossly inadequate. The report stems from the audit of CAAZ's financial statements for the year ending December 31, 2020.
According to the Auditor General, several bank reconciliation items had remained unresolved for years, with some dating as far back as 2016. The committee noted that CAAZ failed to consistently conduct monthly bank reconciliations without offering any valid justification.
"The analysis of the CAAZ audited financial statements revealed significant governance gaps, non-servicing of legacy loans, going concern challenges, and financial management issues," the PAC report stated.
While the committee acknowledged some attempts by CAAZ to address governance shortfalls — including introducing monthly reconciliations and improving financial reporting systems — it stressed that the authority remains in a precarious position.
The report highlighted that CAAZ had not serviced overdue legacy loans totaling ZWL$18.59 billion and domestic loans amounting to ZWL$111 million during the 2020 financial year. More critically, as of December 31, 2020, the authority's current liabilities exceeded its current assets by ZWL$18.29 billion.
"These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Authority's ability to continue as a going concern," the PAC report warned.
CAAZ defended its financial position by stating that it inherited the bulk of its debts in 1999, including US$75 million in legacy loans and US$28 million in China Exim Bank loans. These debts, along with the associated assets, were transferred to the Airports Company of Zimbabwe (ACZ) on August 1, 2021.
"The assets financed by the loans were also transferred to ACZ at the same time," the report noted. "Efforts were being made to transfer back loans amounting to US$48 million to the government, which, if successful, would address the going concern issue."
Despite these developments, Parliament's oversight committee emphasized the urgency of financial reform and accountability within the parastatal, warning that its operational integrity remains under threat without sustained improvements.
CAAZ, established in 1999, is mandated to regulate civil aviation safety and security in Zimbabwe and ensure compliance with international standards. However, with the latest audit findings, questions now loom over its ability to fulfil that mandate under mounting financial pressure.
A report tabled in Parliament by the Public Accounts Committee (PAC) revealed that CAAZ's internal financial controls—particularly concerning the management of cash and bank balances—were grossly inadequate. The report stems from the audit of CAAZ's financial statements for the year ending December 31, 2020.
According to the Auditor General, several bank reconciliation items had remained unresolved for years, with some dating as far back as 2016. The committee noted that CAAZ failed to consistently conduct monthly bank reconciliations without offering any valid justification.
"The analysis of the CAAZ audited financial statements revealed significant governance gaps, non-servicing of legacy loans, going concern challenges, and financial management issues," the PAC report stated.
While the committee acknowledged some attempts by CAAZ to address governance shortfalls — including introducing monthly reconciliations and improving financial reporting systems — it stressed that the authority remains in a precarious position.
"These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Authority's ability to continue as a going concern," the PAC report warned.
CAAZ defended its financial position by stating that it inherited the bulk of its debts in 1999, including US$75 million in legacy loans and US$28 million in China Exim Bank loans. These debts, along with the associated assets, were transferred to the Airports Company of Zimbabwe (ACZ) on August 1, 2021.
"The assets financed by the loans were also transferred to ACZ at the same time," the report noted. "Efforts were being made to transfer back loans amounting to US$48 million to the government, which, if successful, would address the going concern issue."
Despite these developments, Parliament's oversight committee emphasized the urgency of financial reform and accountability within the parastatal, warning that its operational integrity remains under threat without sustained improvements.
CAAZ, established in 1999, is mandated to regulate civil aviation safety and security in Zimbabwe and ensure compliance with international standards. However, with the latest audit findings, questions now loom over its ability to fulfil that mandate under mounting financial pressure.
Source - The Standard
