THE Auditor General, Mildred Chiri has released the 2020 report which exposes details on the bad financial practices amid calls for government departments to strengthen its systems to plug current leakages.
The report speaks on the below thematic issues which need redress urgently;
Unauthorized Excess Expenditure on Unallocated Reserves
The approved budget for Unallocated Reserve as per the Appropriation (2020), Act, 2019 was $1 394 632 000. However, Ministry of Finance transferred to line Ministries a total of $102 085 420 418, resulting in unauthorized excess transfers of $100 690 788 418. The excess expenditure is still to be condoned by Parliament in terms of Section 307 of Constitution of Zimbabwe.
The Ministry of Finance processed various payments to suppliers of goods and services on behalf of Ministries without adequate supporting documentation.
For example, direct payments amounting to US$22 024 406, ZAR6 403 830 and BWP8 359 434 were made by Treasury on behalf of the Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement and Ministry of Transport and Infrastructural Development.
In addition, direct payments amounting to $376 019 364 were paid on behalf of the Ministry of Home Affairs and Cultural Heritage. Detailed documentary evidence of how the transactions were recorded and reported in the accounting records, was also not availed for audit. It was therefore difficult to verify the accuracy of the expenditure reported.
Appropriation Account Expenditure Variances
A number of Ministries had expenditure variances between the figures reported in the Appropriation Account and those in the Public Financial Management System (PFMS), the computerized system used by Government to process payments.
The reported expenditure should be in agreement with what is reflected in the system as all payments are supposed to be processed through the PFMS. Where there is a variance, a reconciliation should be made to establish the cause. In most instances reconciliations were not done thus making it difficult to validate the accuracy of expenditure for the year. This issue was also reported on in 2019.
Advances from Statutory Funds
The Ministry of Public Service, Labour and Social Welfare made unauthorised transfer of funds amounting to $3 602 710 from the Child Welfare and the Older Persons Funds to support the Ministry’s Appropriation Account activities without authorisation from Treasury. This was contrary to Section 116 (6) and (9) of the Public Finance Management (Treasury Instructions), 2019 which prohibits utilisation of Fund monies to meet Appropriation Account expenditure without Treasury approval.
Statement of Contingent Liabilities Reconciliations
The Statement of Contingent Liabilities should show the nature and extent of potential liabilities under guarantees/agreements including any borrowings and repayments by government. However, the Statement of Contingent Liabilities submitted by Treasury was understated by $72 500 000. Treasury had not adjusted the records at the time of concluding my audit.
Expenditure amounting to $1 309 482 199 was not supported by documents such as acquittals, invoices, receipts, delivery and goods received notes as proof that the recorded transactions really occurred. A total amount of $1 179 966 264 related to unsupported subsidy disbursements to ZUPCO. It was difficult to ascertain whether the expenditure was a proper charge to the vote.
Dual Payments Dual payments amounting to $9 384 085 were made to suppliers in 2020 resulting in fruitless expenditure. This was in contravention of Section 59 (17) of the Public Finance Management (Treasury Instructions), 2019 which requires Directors of Finance to institute a system of internal checks to guard against dual payments. Refunds for the double payments were still to be received at the time of concluding my audit in 2021.