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Mrs Mildred Chiri

Daniel Nemukuyu, Harare Bureau
The Department of Roads Fund has failed to properly account for road construction funds amounting to nearly $16 million, a situation auditors blame on its poor accounting system.

The Fund was established to provide financing for road development, rehabilitation and maintenance works. In her audit of the department for the year ended December 31, 2015, Auditor-General Mrs Mildred Chiri noted that financial statements produced by the Fund did not follow the principles of construction accounting as outlined in the International Public Sector Accounting Standards.

She said there was no evidence how the $15 949 143 was used for the construction projects.

“The financial statements produced by the Fund did not disclose construction and rehabilitation costs that were incurred on different projects as required by best accounting practice,” said Mrs Chiri in the audit report.

“Project costs funded by Zinara amounted to $15 949 143. These were not assigned to the respective projects. Furthermore, the value of materials on hand for various projects at year end were not disclosed.

“The draft Accounting Officer’s Instruction in use did not provide guidance on construction accounting nor disclosure requirements.”

Such a failure to apply appropriate construction accounting systems, Mrs Chiri said, could result in stores material disappearing without trace.

Mrs Chiri said such loopholes promoted fraud and cost overruns.

She recommended that the department should follow principles of construction accounting as outlined in the International Public Sector Accounting Standard Number 11.

“The Accounting Officer’s Instructions should provide guidance on construction accounting,” said Mrs Chiri. “Carrying amount of construction materials on hand should be disclosed in the financial statements and an inventory system should be put in place to record all construction materials on project sites.”

Management at the Department of Roads pledged to approach Treasury for guidance on how to properly do accounting for construction projects.

Auditors also noted inconsistencies relating to amounts of funds at bank.

“Financial statements disclosed cash at bank amounted to $1 763 245, while certificates of balance from the Reserve Bank of Zimbabwe had a total of $1 527 998, giving a variance of $235 247, which was not reconciled,” noted Mrs Chiri.

“Following my audit query to the Accounting Officer, a new set of accounts with 29 further adjustments to the financial statements was resubmitted and the new cash balance was $1 610 876.

“The magnitude of the proposed adjustments clearly showed the books of accounts were unreliable.”

This comes as many of the country’s roads are in a deplorable state and need rehabilitation to enable smooth trafficking by the motoring public.

The situation was worsened by the heavy rains that hit the country during the 2016-17 rainy season, which caused floods in some areas that damaged the roads and swept away bridges.

Government is in the process of rehabilitating the damaged roads and bridges, but more funds are required to speed up construction.