EDITORIAL COMMENT: Time to take action on audit reports

MILDRED-CHIRIn the Auditor-General’s Office we have an institution to enhance governance and use of public funds and other resources. It discharges this mandate by scrutinising the operations of government ministries, departments and institutions thereafter drafting annual reports that are forwarded to Parliament and ministries through their respective permanent secretaries.

But it is an institution we have no use for, apparently. This is so because after the AG’s reports — some exposing maladministration and outright corruption — are presented to the government and Parliament complete with recommendations, they are immediately forgotten about as we, collectively as a nation, wait for yet another round of reports the following year.

This tradition might change. A a recent AG statement that the government could have been prejudiced of hundreds of millions through three State enterprises, Zimbabwe National Roads Administration, Environmental Management Agency and Zimbabwe Mining Development Corporation last year due to corruption and maladministration, has triggered a nationwide call for the chief public auditor’s findings to be taken more seriously and acted upon.

With regards to Zinara, the government could have lost $11,6 million after the enterprise failed to deduct $7,5 million withholding tax to 23 suppliers and went on to pay $4,1 million to creditors without authorised payment vouchers. In addition, managers at the roads authority were paying themselves $9,000 each per month as holiday allowances outside the payroll.

On the other hand, ZMDC paid $3,1 million on corporate social responsibility activities with no breakdowns or acknowledgment of receipt from beneficiaries.

Zinara, EMA and ZMDC are among seven State enterprises on which the AG’s Office compiled adverse reports for 2014. We are talking about huge sums of money here which are being lost yet the government is hard-up for cash.

Realistically, no one goes on holiday every month and, in the unlikeliest event that one does, proceed to spend $9,000 every month. So why did the Zinara bosses draw that allowance if the motive was not to corruptly enrich themselves at a time when some rural districts are inaccessible because they lack roads? What deals did they cut at personal level when they let their 23 suppliers get away with the 10 percent withholding tax that should have been forwarded to Zimra?

For not deducting the tax what did their suppliers give them in return as a show of appreciation for allowing them to get away with $7,5 million? We doubt that Zinara chiefs do not know that tax requirement. We see this as a deliberate mistake on their part for them to create conditions for theft.

As for ZMDC, do they even have beneficiaries of their corporate social responsibility activities? We pose this question because there is absolutely no proof that they do for they did not sign for anything they purportedly received. If they exist, what exactly did they receive from the State enterprise? Do the figures add up to $3,1 million? Or the managers simply drew the money under the pretext that it was for social responsibility activities and down the line helped themselves to it? We urge the government to challenge ZMDC managers to prove that they did not steal the $3,1 million.

There is no report of any disciplinary action that has been taken by ministries on officials on the basis of the AG’s reports. If any was taken, it must have been internal, but internal remedies on matters involving clear abuse of public funds and corruption cannot be adequate. In these circumstances, police have to step in, the courts and jail.

Corrective action can also involve the government firing the offending managers for gross incompetence. Furthermore, there can be instances where officials can be reasonably asked to compensate the government in cases where they benefited personally and corruptly from public funds.

The defects noted by the AG highlight the importance of the Zimbabwean Corporate Governance Framework (CGF) for State Enterprises and Parastatals. The framework defines corporate governance as “a set of processes, customs, values, codes, policies, laws and structures governing the way a corporation is directed, controlled and held accountable. It ensures that the organisation is run properly, that goals are being achieved and funds are being managed with high standards of propriety and probity.”

But having the framework in place and not doing anything useful about it is the same as having an AG’s Office that churns our damning yearly reports and recommendations which are never acted upon. Our point is the AG’s recommendations must find practical expression, culprits named, shamed and appropriately punished. The same applies to those who would violate the code of corporate governance.

The AG herself, Mildred Chiri, has powers in terms of the constitution to order action to be taken on officials pinned down by her audits. She however, has so far refrained from invoking those powers, perhaps, expecting other arms of the state to do their work. We, too, expect them to start acting now. She can go a step further by ordering action.

We note that the government is making promising movement towards that. The fact that the governance code is being worked on is encouraging. We have seen managers at Air Zimbabwe being tried and jailed for corruption, former PSMAS boss, Cuthbert Dube being sacked over salarygate. That is in relation to the government’s general fight against corruption, but more can be done specifically with regards to yearly findings of the AG.

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