THE Auditor General has raised a red flag over questionable accounting procedures at the Civil Aviation Authority of Zimbabwe (CAAZ) that have left the parastatal sinking in debt.
A report presented in Parliament by the public accounts committee (PAC) noted that the CAAZ’s controls over the management of cash and bank balances were not adequate.
As a result, there were a number of unreconciled items at year-end, some dating back to 2016, which had not been resolved.
This emerged from a report of the Auditor General’s audit into CAAZ’s financial statements for the financial year ended December 31, 2020.
“The analysis of the CAAZ audited financial statements revealed significant governance gaps, non-servicing of legacy loans, going concern challenges, and financial management issues,” the report reads.
“The committee acknowledged some of CAAZ’s positive steps, such as addressing governance deficiencies, instituting monthly bank reconciliations, and streamlining financial reporting.
“However, the committee emphasised the need for continuous improvement and vigilance in governance and financial management to achieve long-term sustainability.”
The committee noted with concern that CAAZ failed to constitute monthly bank reconciliations without valid reasons during the period under review.
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The committee also flagged failure by the CAAZ not to service overdue long-term legacy loans amounting to ZWL$18,59 billion and domestic loans amounting to ZWL$111 million during the year ended December 31, 2020.
“In addition, the authority’s current liabilities exceeded its current assets by ZWL$18,29 billion as at December 31, 2020,” the report reads.
“These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Authority’s ability to continue as a going concern.”
According to the report, the CAAZ said it inherited loans in 1999.
“The legacy loans amounting to US$75 million and China Exim Bank loans amounting to US$28 million were transferred to ACZ on August 1, 2021,” the report read.
“The assets financed by the loans were also transferred to ACZ at the same time.”
“Efforts were being made to transfer back loans amounting to US$48 million to the government, which, if successful, would address the going concern issue.”
The CAAZ is the regulatory body responsible for the safety and security of civil aviation in Zimbabwe.
It was established in 1999 and is tasked with overseeing all civil aviation activities within the country, ensuring compliance with both national and international standard.
