Harare City Council lost over US$200 million amid a financial mess, grand theft and looting as the City of Harare officials are using personal swipe machines to collect money from ratepayers.
The grand looting and financial mess, investigations reveal, was created by the shambolic billing system following the withdrawal of Quill Associates' Enterprise Resource Planning (ERP) system, leading to corrupt elements manipulating systems for their own benefit.
This was also made worse by the coming into use of a system, SAGE, littered with a lot of inefficiencies leading to mismanagement of funds, unexplained leakages, a shambolic asset register and an opaque billing system that has created a mess in the city. It emerged that officials are pocketing millions of dollars in the process.
The council has ignored recommendations by the Auditor General to reengage Quill Associates for an ERP system so it can track the missing US$200 million owed to the departure of the software company.
An ERP system is software that integrates and automates various municipal operations, such as budgeting, procurement, payroll, and service delivery, to enhance efficiency, transparency, and responsiveness to the community's needs.
After the divorce of Quill Associates and the City of Harare in 2019, the council engaged CCG Systems for a temporary ERP system, and the results have been chaotic.
The Auditor General has consistently flagged weak systems within the council. As far back as 2020, a private auditor also unearthed the local authority was not capturing transactions as they occurred.
Internal council documents seen by 263Chat reveal that transactions with suppliers amounting to about US$15 million were not instantly recorded in the council's system in 2023. Another transaction took as long as 345 days to be recorded, while another worth US$1.6 million was not recorded at all, raising suspicions of mismanagement of finances at the expense of service delivery.
The Auditor-General has also flagged Harare with reports that the city was keeping its payables outside of the ledger. A payable is a sum of money owed or due to be paid.
Residents are not happy.
Harare Residents' Trust (HRT) Director Precious Shumba said the delay in implementing the Auditor General's recommendations was because the officials at the Town House want to continue hiding critical information.
"When the Auditor General produced the damning reports, the matter became an issue. The owners of the ERP system requested to assist the City of Harare in producing the trial balance and bank reconciliation, but the (council) guys wanted to hide critical information. If all the critical information is put in the billing system, a lot of people will be arrested because corruption is unsustainable," Shumba said.
In 2019, councillors terminated the Quill Associates contract, citing the cost of the ERP system's annual fees.
Investigations, however, show that the reason for the termination of the contract was to avoid being exposed.
Harare hastily tried to reengage Quill Associates for an ERP after President Emerson Mnangagwa gave local authorities a 30 June 2024 deadline for them to submit functional ERP strategies and valuation rolls.
Shumba said it was at this point Harare tried to engage Quill Associates for the system.
Weaknesses Of The SAGE System
The SAGE system the council was using is porous and filled with many deficiencies.
SAGE, it emerged, does not have a payroll module, and Harare City Council is currently using a third-party software, Belina, for the payroll function. Belina is not interfaced with SAGE and has no activated leave module.
This has resulted in leave days not being accurately recorded and updated, leading to a financial misstatement of the leave pay provision and non-compliance with International Public Sector Accounting Standards.
The system does not have an automated change log, which is a challenging development in trying to keep track of the modifications made to the software.
It may be challenging to trace back changes to the responsible individuals, making it harder to address issues or bugs.
Fixed Assets and Investment Property Register
Observers say the City of Harare also finds it challenging to maintain credible asset registers because of the inefficient system. The asset registers are kept in Excel outside the SAGE ERP system; therefore, there is no module in the accounting system maintaining assets.
System Incompleteness
The auditor noted incompleteness with the revenue generated from shop licenses in the Sage ERP system and the amount recorded on the City of Harare's trial balance and general ledger.
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This variance could be a result of human interference and collusion or system deficiencies with completeness and accuracy. It should also be noted that not all transactions were accurately and completely processed in the new system, further indicating possible system shortcomings.
Billing
The auditor noted understatements in consumer revenue as potential reports from Sage ERP differed from the amounts recorded in the financial statements.
It is widely acknowledged that the SAGE ERP system has shortcomings, particularly with the billing cycle of Harare City Council, due to the nature of operations and the sheer size of Harare.
The Sage ERP is a generalised system and is not designed and tailored for the nature of urban council operations.
General Security Controls
The auditor noted that there is inappropriate access to the OS Administrator group. Which resulted in some billing officers having access to the administrator group.
Inappropriate access may lead to unauthorised modifications, potentially destabilising the system or introducing security vulnerabilities.
