HARARE FIRMS DUPE BCC
Hundreds of thousands lost to fly-by-night suppliers
BULAWAYO City Council might have lost over $1 million through misappropriation of funds and irregularities in awarding tenders.
The council has been accused of awarding tenders to non-traceable companies that could have easily defrauded the municipality, a parliamentary portfolio committee has revealed.
This emerged when senior council officials who included acting town clerk, Mrs Sikhangele Zhou, finance director Kimpton Ndimande, and information technology director Mr Mpazamiso Ndebele who is also the assistant finance manager and chief internal auditor Mr Tennyson Mpunzi appeared before the Public Accounts Committee where they gave oral evidence in Bulawayo yesterday.
The committee quizzed the quartet following a report from the Auditor General which showed a number of irregularities in the accounting system at the local authority.
The report by the AG showed that there were irregularities in the purchase of ambulances and vehicle trackers in 2010 as council paid in advance for the supply of ambulances amounting to $205 106 and later paid another supplier $100 000 in advance. None of the vehicles had been delivered. Mrs Zhou confirmed that council had been duped by Axis Medical Corporation and Tracat Engineering both based in Harare and they had disappeared.
“To be honest both suppliers were from Harare and they haven’t delivered. We even instituted court proceedings. We won the case but they (suppliers) are nowhere to be found. They are no longer available at their given addresses. We have engaged the police to trace them,” said Mrs Zhou.
Committee member and Mutoko North MP Cde David Chapfika said it was negligence by the local authority that smacked of possible collusion between council employees and the two suppliers.
The officials were also grilled on the lack of supporting documents for repairs and maintenance amounting to $151 504 and $179 396.
Mr Ndimande said the documents could not be found because there is high demand for them from various institutions such as Zimra and Zinara. He however said there were invoices to show that payment was made.
The committee asked why there was a variance amounting up to $1 million in 2010.
The AG also noted that council did not do monthly reconciliation between the payroll summaries and general ledger resulting in variances of $345 236 in 2010 and $963 108 in 2011.
“You will realise that during that time we were upgrading from the Zimbabwe dollar to the multicurrency hence there was a backlog in reconciling the balances,” said Mr Ndimande.
MDC Matabeleland South proportional representative member, Ms Priscilla MisihairabwiMushonga, pressed Mr Ndimande to explain the $1 million variance.
“The corrective action has been taken to the system to reconciliations monthly. The source of the challenge was at that time the section was not fully staffed and we are now doing monthly reconciliations,” said Mr Ndimande.
“The variance rose say, between payroll A and payroll B, but they did tally. The variance was resolved. We can produce documents to that effect.”
The MPs expressed concern over the high number of banks which council was using which results in delays in reconciliation of figures.
Mrs Zhou said council was banking with 13 different institutions as part of its risk management strategy as local banks tend to be unreliable and could close any time.
She said council had lost money to three banks which were placed under curatorship.
The report also showed that there were significant unreconciled balances of $486 986 and $104 486 for the Kingdom Bank general expenses and Kingdom Bank account respectively.
Mr Ndimande said the finance department had been understaffed hence the delays in reconciling statements.
Council also lost about $76 000 through embezzlement from an employee who later resigned and signed an agreement to repay.
Mrs Zhou told the committee that council claimed $46 000 from the employee which is what the internal auditors picked and the matter is before the courts.
Public Accounts Committee chairperson Ms Paurina Mpariwa said although the committee was yet to make deliberations, the evidence presented by the officials showed that the council was faced with a serious shortage of key personnel and had loopholes in its system. — @AuxiliaK.
Mrs Sikhangele Zhou