Zimpapers Logo

Nyemudzai Kakore and Ruth Chipayi
Harare City Council is operating 35 bank accounts, 10 of which are active, thus posing a potential risk of fraud by council officials, an audit report has revealed.

Audit results of bank reconciliations for the city’s bank accounts dated June 30, 2014 by the acting audit manager revealed that council had not reconciled all of the accounts for three years from 2009 to 2012.

“Unreconciled dormant cashbooks amounted to $15 572 704, 66 without corresponding bank accounts,” revealed the audit.

The audit showed that cashbooks were not updated, with cash payments made outside the BIQ system and that there was lack of independence in salaries reconciliations with unprocessed transactions in the BIQ system. BIQ is an accounting software programme used by municipalities and other billing entities.

The audit committee enquired why council had so many bank accounts.

Town Clerk Dr Tendai Mahachi told the committee that 25 of the bank accounts were dormant.

“The Town Clerk reported that the city had that big number of bank accounts, but currently there were only 10 (active) bank accounts,” read part of the committee’s minutes.

“The rest were deleted and were lying dormant. However, these dormant bank accounts were closed immediately before being reconciled to avoid fraudulent activities by employees.

“Reconciliations would be done soon on all dormant bank accounts.”

The audit committee requested that Dr Mahachi ensure that a report on the current status of the accounts be done and that action is taken to implement audit observations.

During the deliberations, council resolved that the acting finance director ensures that the number of operational bank accounts and cashbooks be reviewed downwards to remain with a smaller number. It also resolved that bank accounts should be reconciled to the cashbooks on a monthly basis.

“All dormant accounts should be reconciled and deactivated in the BIQ system and all cashbooks and respective bank accounts be reconciled prior to closure,” read the minutes.

“Only substantiated balances which represent the actual cash in the bank accounts be transferred on closure of the cashbook.”

Council also resolved that the salaries account be independently reconciled to the salaries cashbook in the BIQ system periodically and that a competent independent official should reconcile the salaries account.

The city has been facing financial challenges, with council officials accused of corruption that has cost the council of millions of dollars. Council has also been failing to pay its workers.