‘Corruption rife at parastatals’

MOST State enterprises and parastatals (SEPs) seem to be in the business of paying salaries, and some of the executives at the entities routinely flout procurement regulations to enrich themselves, Accountant-General Mr Daniel Muchemwa has said.

Speaking at the Corporate Governance Worksop for SEPs at Management Training Bureau in Harare on Thursday, Mr Muchemwa said some enterprises were spending funds which were not budgeted for.

“Some State enterprises survive just for paying salaries,” he said.

“I think it’s fair comment. As a general rule, we expect employment costs to hover below 30 percent of your revenue. Revenue is what you have earned, not what you have told everyone you will earn. There is a major difference between the two.

“So, when we are saying 30 percent, we are talking about that which you have collected, that is revenue. If you have supplied 90 percent of your revenue to State enterprises that are not paying, we are talking about 30 percent of (the 10) percent. That makes the situation more difficult to manage.”

Mr Muchemwa raised concern over the rising inter-parastatal debt, saying one of the State enterprises had failed to recover $8 million from related parties.

There were four key issues, he said, that stuck out from the Auditor-General’s 2016 report - corporate governance, revenue collection, management and debt recovery.

“In the area of debt collection, there is a specific concern that we have developed a culture where we think if we borrow from a State enterprise, we do not have to pay back,” said Mr Muchemwa.

“Inter-State enterprise debt is growing. And those that continue to seek debts are very clear that you can go and ask for some more service from your State enterprises without even paying for anything. How do we provide a service to somebody we know is not going to be paying us; it cannot be a business decision. Yes, it is a State business decision.”

Mr Muchemwa said the Auditor-General was also concerned at the continued flouting of procurement regulations by State enterprises, which seemed to be calculated for personal benefit.

“I discovered recently from the Mayor of Harare (Bernard Manyenyeni) that there is dispute as to who approved council salaries,” he said. “People were saying Harare City Council employees are overpaid and the Mayor said I am not aware who approved these over-payments and there was an interesting debate on whether he should have been aware or not.”