Bosso debt soars to $500 000

HIGHLANDERS Football Club have been advised by their new auditors Grant Thornton to set up a workable accounting system to manage the club's finances as they continue to be saddled with debts of over $500 000.

Philip Ndlovu, a partner at Grant Thornton, on Sunday told the Bosso annual general meeting that the club's accounting system was not viable for the club which has been declared broke and unable to service its creditors.

"You are technically and factually insolvent. We cannot say you have enough resources to continue as a concern. Your creditors can also not be ascertained because of your system. If all your assets were to be sold you would not be able to meet your liabilities," Ndlovu said.

"The responsibility for the prevention of fraud and error rests with management through the implementation and continued operation of adequate accounting and internal control systems."

According to the executive summary of the auditors: "The company (Highlanders) incurred a cumulative net loss at the year ended December 31 2012 of $472 960 and, as at that date its total liabilities exceeded its total assets by $194 485. These events indicate a material uncertainty that may cast significant doubt on the company's ability to continue as a growing concern and, therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements (and notes thereto) do not disclose this fact."

According to the summary, the Bulawayo football giants are $511 332 in the red and Grant Thornton said the club board and executive should advise of projects to trade Bosso out of insolvency, operate at a profit position and establish other projects to sustain core ventures.

Last year, Highlanders generated 73% of its total revenue from its football division, but it is noted that they incurred losses. Grant Thornton gave the thumbs up to the Manwele Beer Garden project which made a profit of $10 681 in five months.
Highlanders won a tender to run the beer garden from the city council.

The club was found wanting in authorisation of club expenditures, authorisation of journal entries, segregation of duties, audit preparedness, budgetary controls, revenue, creditors and payments.

It was, therefore, advised to hire quality staff and increase training, produce monthly management accounts, be prepared for audit, establish a well thought and feasible business plan and implement key accounting systems and controls.

Club chairman Peter Dube said they were working on measures to rectify the situation.