AG flags 'accounting black hole' in rural council schools

Auditor-General Vimbai Chikwenhere has raised serious concerns over financial accountability in schools administered by Rural District Councils (RDCs), warning that millions of dollars collected through school fees, levies and government grants cannot be properly accounted for due to poor financial record-keeping.

In her report tabled before Parliament on June 26, 2026, Chikwenhere revealed that 34 local authorities had failed to submit their 2025 financial statements, while six councils had not submitted financial statements for both the 2023 and 2024 financial years.

The audit examined 96 financial statements from 81 local authorities covering the 2022 to 2025 financial years and found that, despite improvements in compliance, significant weaknesses in public financial management persist.

According to the report, 58 local authorities are now up to date with their financial reporting, an improvement from 26 during the previous audit cycle. A total of 96 financial statements have been completed, while a further 78 remain under audit.

However, Chikwenhere cautioned that delayed submission of financial statements continues to undermine transparency and accountability.

"Late submission of financial statements creates accountability gaps and also results in the inability of local authorities to provide supporting documents or reconcile variances identified during the audit," the report states.

She recommended closer monitoring of the six councils that continue to default on their reporting obligations.

A major concern identified during the audit was the failure by Rural District Councils to properly account for the finances of schools under their administration.

The report cites inadequate financial records at RDC-run schools as a significant audit finding, warning that the absence of proper accounting systems makes it difficult to accurately track school revenue, expenditure and assets.

To address the problem, the Auditor-General recommended that the Ministry of Finance conduct skills-gap assessments across all Rural District Council schools and roll out a phased national programme to standardise financial reporting systems.

The findings have raised fresh concerns over the management of school fees, levies and government grants collected by council-run schools.

Harare Residents Trust director Precious Shumba said the report highlights broader governance shortcomings across the public sector.

"The lack of accountability and governance issues are negatively impacting social and economic development. The Auditor-General has exposed financial leakages affecting development," said Shumba.

Despite the shortcomings, Chikwenhere acknowledged progress made through the Ministry of Finance's implementation of International Public Sector Accounting Standards (IPSAS), noting that the reforms have contributed to improved submission of outstanding financial statements.

The report is expected to increase pressure on the Treasury and the Ministry of Local Government and Public Works to strengthen financial oversight of local authorities, particularly as government continues to channel devolution funds to councils amid ongoing concerns over service delivery and public financial management.