Audit unearths multi-million-dollar scam

Innocent Ruwende Senior Reporter
Government’s probe into the operations of Mutare City Council has opened a can of worms, with the special audit report showing that over $3 million collected revenue was not banked into the city’s accounts and that the city has 11 accounts which were overdrawn by more than $2 million, among many acts of financial mismanagement.

The audit also showed that while council workers have gone for 18 months without salaries, town clerk Mr Obert Muzawazi claimed over $30 000 school fees for his children, including one who is attending a university in the United Kingdom, which cost ratepayers 7 000 pounds annually.

The allowances were not disclosed as required in terms of International Public Sector Accounting Standards.

The report — which is expected to claim the scalps of the city’s management team — also showed that last year’s senior employment costs did not conform to the 2015 window-dressed budget which upon implementation totally ignored the ministerial directive to cut salaries to $4 500.

According to the report, the city’s management pocketed $340 848 more, with the town clerk pocketing $9 288 while other directors pocketed between $4 700 and $7 416.

“Failure by the council to implement the 2014 ministerial directive was in itself a financial shenanigan which resulted in the council failing to sustain its total wage bill. Council ended up plunged in debts in order to finance its working capital requirement.

“The council’s 2015 annual budget was window dressed in order to secure ministerial approval as the council incurred a budget overrun of $5 646 958 on employment costs only,” read part of the report.

The report showed that the actual costs to service delivery ratio for Mutare City Council for the period January 2015 to November 2015 was 63:37 percent instead of the required 30:70 in favour of service delivery.

Government auditors also revealed that the council was last audited for the financial year ending December 31, 2013 and financial statements for 2014 were not yet ready for audit in violation of Section 305(b) of the Urban Council’s Act chapter 29:15 which requires financial statements to be ready for audit by no later than 120 days after the end of each financial year.

“Daily takings were at times not banked since the expenditure section owed cash receipted by the revenue section before it was banked in violation of the council’s own financial regulation.

“Town clerk and the director of finance failed to establish a sound financial control environment so as to manage the council’s cash flows effectively. The council was spontaneously paying for its expenditure as evidenced by cash requests made out of daily takings before banking,” read the report.

The report also showed that the city was using a valuation roll which is outdated and still in Zimbabwe Dollar rates in violation of the law.

The ministry sent an audit team to probe Mutare City Council’s payroll, amid reports of ghost workers and allegations that managers were receiving salaries on time, yet the local authority is struggling to pay low grade workers their wages since 2013.

Manicaland Provincial Affairs Minister Mandi Chimene has since implored Local Government Public Works and National Housing Minister Saviour Kasukuwere to sack all the directors.

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