14 September 2017

Zimbabwe: 30 Parastatals Escape Govt Audit

Photo: Jerry Chifamba/allAfrica
(File photo).

At least 30 parastatals and State enterprises were not audited last year for various reasons which will be revealed by Accountant-General Mr Daniel Muchemwa when he tables a comprehensive report before Parliament next week.

The report will show that there have been under-performing entities which had become a drain on the fiscus. Six other parastatals were noted for serious management flaws. Mr Muchemwa said this during a half-day workshop to discuss the Public Entities and Corporate Governance Bill with chairpersons of Parliament's portfolio and thematic committees yesterday.

"If I turn to governance, the auditor-general identified three parastatals where she put a non-disclaimer, the auditor general says we don't know where these people are," he said.

"I don't think they know where they are going. She had adverse reports on another three, those are serious observations she made about failure. She did not qualify 62 of out of 108 State enterprises and parastatals. She qualified 10. In 10 of them, she found specific issues that she wanted addressed.

"She audited 78 of our 108 State enterprises and parastatals. Which means there are 30 others that are not even in the disclaimer range. "That is a worrying state of affairs when you have a large number of institutions that are not accountable to Parliament and, therefore, to the people of Zimbabwe. I think those are serious governance issues."

Asked by Chegutu West representative Cde Dexter Nduna, the chairperson of the portfolio committee on Transport and Infrastructure Development to identify the concerned entities, Mr Muchemwa said he will present a detailed report to Parliament next week.

"Within seven working days, I am to submit a name and shame report to the House on the various issues highlighted (by the auditor-general Mrs Mildred Chiri)," he said.

Mr Muchemwa said there was little supervision on how much revenue was being generated by parastatals and State enterprises, resulting in leakages. "On revenue collection, management and debt recovery, we are not doing well as businesses and revenue collection is one of those areas where control is not adequate, temptation is high and, therefore, the potential for losses is even higher," said Mr Muchemwa.

Mr Muchemwa said a number of examples include NetOne where $11 million was lost to related parties that include management and companies they owned, while at Zimbabwe Electricity Transmission and Distribution Company, a number of properties were identified that were not billed since 1984.

At the Zimbabwe Revenue Authority, Mrs Chiri identified 29 000 temporary import permits that had not been cleared, with a potential duty of $42 million, while at the Zimbabwe National Parks and Wildlife Management Authority, there was mismanagement of leases, with an example of one concession were $1 million was expected, but ultimately the authority received $600 000.

Mr Muchemwa said it was imperative to develop a culture of performance among parastatals and State enterprises management, so that the entities performed as expected.

The Public Entities and Corporate Governance Bill that is expected to be debated in Parliament soon will bring a raft of changes to management of such entities, including term limits for boards and management, a code of conduct, salary limits and obligations to craft organisational strategies.

Speaking at a meeting with captains of industry at State House in Harare last week, President Mugabe said non-performing parastatals and State enterprises should be dissolved as they are stifling economic growth through perennial dependence on the fiscus.

He said some ailing parastatals deserved to be "buried in coffins" as they were grappling with high overheads and under-capitalisation, coupled with corruption and lack of good corporate governance.


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