Chaos, corruption in councils

THIS continues from last week as we look at actual examples of some of the rot happening in councils reported in the Auditor-General's Report for Local Authorities 2018.

The report shows the extent of the gross financial mismanagement of council affairs and abuse and mismanagement of ratepayers' funds and abuse of office.

The report is full of evidence of gross mismanagement, fraud, negligence and general ineptitude by councillors running different local authorities.

Of interest are the curious dealings of the former minister of Higher Education Professor Jonathan Moyo, who is now in political exile.

His opaque dealings with Zimdef funds just won't go away from the books. On occasions, large funds were mysteriously deposited and transferred back and forth between his then ministry and Tsholotsho Council's bank account. US$250 000 was transferred to and from Hillside Teachers' College for 'Zimdef STEM' activities on November 14, 2017 and November 16, 2017, respectively. The transactions are even more curious as the dates coincide with the week that saw the unexpected exit of former President Robert Mugabe's 37 from power and his own flight from the country.

Moyo was one of Mugabe's closest henchmen.

Another payment of US$25 000 had passed through Tsholotsho Council's bank account for Zimdef STEM activities.

Tsholotsho RDC received and utilised other Zimdef STEM funds of approximately US$70 000 funds deposited by the ministry.

The council did not avail any supporting documents for auditing and upon enquiry, the AG was told that the transactions were done on the instructions of Moyo.

It is the AG's opinion and, indeed, anyone else who encounters these unexplained transactions that the council's bank accounts may have been used as a conduit for processing irregular transactions by the minister and his cohorts.

Moyo was eventually accused of embezzling Zimdef funds, but the matter is still pending due to his inglorious flight from the country in November 2017
There was a noted rise in red flags over governance issues.

Generally, councils are just not being managed and run properly.

It is a complete shambles in many councils. Some councils simply do not have policies and procedure manuals and their accounting is shambolic.

Examples of such are Chitungwiza, Karoi and Bubi councils, among others.

Many are not remitting statutory obligations despite effecting deductions from employees' salaries for LAPF, Paye, Zimdef, Standards Development Levy and NSSA.

This has serious adverse implications on pensions and individual tax compliance for council employees.

They are just doing what they want. In Chiredzi, allowances paid to council executives for electricity, water, security, school fees, rentals and gardener costs are not being taxed.

This is corrupt, illegal and in breach of the Income Tax Act. Gweru City Council could not reconcile its rates and water accounts with bank statements. In one account, payments of more than US$12 million dollars were irreconcilable with bank statement balances, reflecting only US$303 942. One account with payments of more than US$7 million only showed US$70 582.

This is not to conclude the money was stolen, but may only show poor accounting methods and poor management of ratepayers' money. In Harare, overall lack of accountability and good governance by the council was noted.

Very questionable decisions were made, which resulted in the council losing ratepayers' money.

One example was the council's decision to hire equipment at exorbitant prices when it was substantially cheaper to repair its own equipment.

The council also borrowed US$32 million dollars without the minster's approval in defiance of the Urban Councils Act.

Almost all councils, including Chegutu, Mwenezi Disitrict Council, Hwange and Bubi, among others, were specifically fingered for their poor financial management systems. However, some of the councils are so underfunded that they are unable to operate.

The poor allocation of resources can be attributed to central government for failing to play its role in ensuring the welfare of all citizens.

While other councils are wasting money like Harare, others like-PFura Rural District Council, Mt Darwin and Dotito are so poorly funded and resourced that they use ox-drawn carts to transport refuse.

In-PFura, there was no evidence of systematic billings being made to ratepayers. They use manual registers and antiquated filing and billing systems, such that council records are in total shambles.

Most of the corruption in councils involves the sale and allocation of residential and commercial stands. Gweru City Council was unable to provide the layout plans for the stands it had sold during the year. Such bungling is inconceivable and is highly suggestive of corruption.

In Karoi, there were no records of stands sold. In Lupane, stands owned by employees were exempted from paying rate charges. This was in contravention of the Urban Council's Act, which only allows exemption for non-profit organisations.

For the 2018 financial year, only three out of ninety-two local authorities had their financial statements audited and reported on. Seventy local authorities did not submit their financial statements for audit so their affairs are largely unknown, but it is highly suggestive of many bad things.

It was, therefore, impossible for the AG to check if recommendations given in prior reports had been followed. So, it is likely to be the same issues in the 2019 report.