ZIMBABWE’S Treasury made foreign direct payments on behalf of 16 government ministries amounting to US$300 599 941 (ZW$18 955 573 888 using the Reserve Bank of Zimbabwe 2020 spot rates) without the required parliamentary approval and the knowledge of beneficiary ministries, in a disclosure which further shows how the country’s public finances are in a shambles.
This revelation which throws new light into maladministration by President Emmerson Mnangagwa’s government is contained in Auditor-General Mildred Chiri’s 2020 report on Appropriation Accounts, Finance and Revenue Statements and Fund Accounts. The 2021 reports are not yet out.
Apart from leadership, governance and policy failures, as well as exogenous factors like targeted sanctions and vagaries of international trade, including global commodity prices fluctuations, Zimbabwe’s economy is struggling due to authorities’ corruption, incompetence and extended period of mismanagement of government affairs, including public finances.
The report, which has now been tabled in Parliament, sheds light on how government finances continue to be in a mess, with Treasury and ministries making payments without supporting documentation in numerous cases, resulting in blatant corruption and loss of millions of dollars in public funds.
Several government ministries lost revenue after paying for goods, including cars, which were not delivered, while in many cases purchased assets were not recorded in official registers.
The Ministry of Finance, according to Chiri, made unauthorised excess transfers of ZW$100 690 788 418 without condonation from parliament as required by section 307 of the constitution of Zimbabwe, among many other anomalies.
Chiri also revealed that the bulk of the audit findings, 55%, which she wanted addressed from her 2019 report, were ignored by government ministries, while 28% were fully addressed and 17% partly attended to.
“I observed that Treasury made foreign direct payments on behalf of 16 ministries amounting to US$300 599 941. However, I noted that a number of the ministries were not aware of these payments and did not acknowledge these transactions,” Chiri says.
“As at November 15, 2021, five line ministries disputed Treasury disbursements from direct payments totalling US$183 638 970 (approximately ZW$14 763 681 058).”
Chiri expresses concern that the direct payments were not uploaded to the respective ministries’ votes in the public financial management system. As a result, the ministries did not report the amounts in their appropriation accounts for 2020.
Treasury made a foreign direct payment of US$155 703 721 on behalf of the Ministry of Mines, but the ministry was only aware of US$486 501, giving a variance of US$151 217 220.
A foreign direct payment of U$15 044 768 on behalf of the Energy ministry was made without its knowledge. Treasury made a foreign payment of US$12 345 758 on behalf of the Ministry of Defence without its knowledge.
A total of US$10 254 123.77 was paid on behalf of the Health ministry, but the ministry was only aware of a payment of US$5 252 688, giving a variance of US$5 001 436.
Treasury also made a foreign direct payment of US$1 688 376 on behalf of the Public Service Commission, which was however only aware of US$1 658 586, giving a variance of US$29 787.
In addition, the ministry made payments to its foreign suppliers and service providers which were questioned by Chiri.
“My review of the direct payments register showed that Treasury made various foreign payments totalling US$20 691 044 (approximately ZW$770 646 758 when converted to Zimbabwe dollars using RBZ spot rates for 2020. The payments were made to suppliers and service providers on behalf of the ministry of Finance and Economic Development during the year ended December 31, 2020. The expenditure was not uploaded in the public financial management system and hence, this expenditure was not accounted for in the ministry’s appropriation account for the year 2020,” her report says.
The Auditor-General says whereas the approved budget for unallocated reserves as per the Appropriation Act was ZW$1 394 632 000, the Ministry of Finance transferred ZW$102 085 420 418 to line ministries, resulting in unauthorised excess transfers of ZW$100 690 788 418. The excess expenditure was not approved by parliament as required by law.
Some payments done by the Ministry of Finance to suppliers of goods and services on behalf of ministries were done without adequate supporting documentation. Detailed documentary evidence was also not provided for the audit, raising eyebrows.
“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 ZW$376 019 364 were paid on behalf of the ministry of Home Affairs and Cultural Heritage,” she said.
“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,” it says.
Chiri further voices grave concern over government revenue collection given that some ministries and commissions failed to submit their revenue returns indicating how much they collected during the year under review.
This, she says, limited the scope of her audit.
“Furthermore, revenue amounting to ZW$320 831 782 collected from company registrations, trademarks and patents, stamp duty, refund or miscellaneous payments from votes and other revenue sources was not supported. The accuracy and completeness of the revenue figures disclosed could not be validated,” Chiri says.
The Auditor-General also expressed concern over the non-delivery of procured assets, including cars.
“Assets comprising 30 motor vehicles worth ZW$117 042 902 that were purchased by three ministries in 2020 had not been delivered by September 2021,” she says.
At least 24 of the vehicles in question were purchased by the ministry of Information, Publicity and Broadcasting Services, while three were procured by the ministry of National Housing and Social Amenities.
The Ministry of Justice had also not taken delivery of three vehicles, which were paid for.
Curiously, the ministry of Youth, Sport, Arts and Creation had also not taken delivery of two vehicles purchased in 2017. Chiri raises similar concerns in the 2019 audit, but nothing was done.
The Ministry of Environment, Climate Change, Tourism and Hospitality Industry did not take delivery of 13 laptops, 13 Samsung Galaxy tablets and 50 school desks and chairs despite paying.
“Failure by paid contracted suppliers to fulfill their contractual obligations is a cause of concern. This trend has negatively impacted the ministries in carrying out their mandate as there was a shortage of motor vehicles and tools of trade. Follow-ups should be made on the outstanding deliveries,” Chiri says.
Some government ministries were also not maintaining an updated manual and a Public Financial Management System Asset Register, in contravention of Section 100 of the Public Finance Management Act.
The Ministries of Information Communication Technology and Courier Services, Higher and Tertiary Education, Science and Technology Development and Energy and Power Development had assets worth ZW$31 161 392 procured in 2019 and 2020 not recorded in their asset registers.
Some ministries did not even maintain manual asset registers.
Year after year, Chiri’s audits reveal the massive chaos in public finances and looting in government, parastatals and local authorities, but they have been largely ignored by the executive, legislature, law enforcement agents and the Zimbabwe Anti-Corruption Commission, which spend public resources chasing small fish, while failing to tackle whales of corruption mainly in the public sector.