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Parastatals found wanting

Twenty-three parastatals are failing to adequately and sustainably provide the services for which they were created and some of them have made questionable financial deals that expose them to huge losses, Auditor-General Mildred Chiri said in her audited accounts for State Enterprises and Parastatals for 2017.


The report, which was tabled before Parliament by Finance minister Mthuli Ncube, mentioned Zesa and its subsidiaries, the Grain Marketing Board, National Railways of Zimbabwe, Zimparks, Zimbabwe Institute of Public Administration and Management, Zimpost, Allied Timbers and the National University of Science and Technology, among the troubled entities.

She noted that at some of the institutions, there was lack of due diligence in the procurement of goods and services, sometimes resulting in payments made but nothing delivered. A case in point was that of the Zimbabwe Electricity Transmission and Distribution Company where such absence of due diligence left the company exposed to a loss of $2,3 million.

“Zimbabwe Electricity Transmission and Distribution Company made prepayments to two related suppliers, and the first supplier was paid $350 078 but did not deliver, and the company engaged a second supplier and paid $1 413 960 who again did not deliver,” the report said.

“Another case involved Zimbabwe Power Company which paid $3 632 069 for the Gwanda Solar project (Wicknell Chivayo) in respect of pre-commencement works between January and June 2016.

“The extent of non-performance exposed the company to a potential loss of $2 300 000. The Civil Aviation Authority of Zimbabwe paid $419 677 in 2015 for the supply of furniture, however, furniture worth $391 063 had not been delivered.”

On Air Zimbabwe, Chiri said their 2010 accounts had 16 issues that led to a disclaimer opinion, adding that the airline was unable to provide supporting documentation for transactions entered into.

“Of concern were unsubstantiated debit and credit entries amounting to $213 million and $168 million respectively. The financial statements also included a suspense account of $22 million and the entity could not provide supporting documents for expenditure amounting to $17 million.”

Chiri said her 2017 audit also revealed entities whose boards increased their allowances without approval from their parent ministries, which included the National Oil Infrastructure Company (Noic), Zimbabwe Broadcasting Corporation, Midlands State University and Competition and Tariff Commission.

“The Noic Feruka depot was using the assistant depot manager’s personal bank account for administering cash transactions for the company. The same obtained for Zinara which was disbursing cash to provinces through employees,” Chiri said.

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