Chinamasa under fire

4.2.3 Misappropriation of funds

Some Ministry officials were alleged to have connived with suppliers and third parties and defrauded the Government of substantial amounts of money. The Permanent Secretary informed the Committee that among the officials at the centre of defrauding Government, were a Principal Director, a Deputy Accountant General, an Acting Deputy Accountant General, 2 Chief Accountants and 5 other members of staff.

The Committee was also informed by the Secretary that seven of the officials were dismissed on February 1, 2016 in terms of Administration procedures after the Courts had found them not guilty. One case was still being finalised and two cases were being handled by the Public Service Commission. As a control measure, the Accounting staff have been directed to take leave days regularly in order to minimize collusion.

4.2.3.1   The Committee expressed concern that this case could be a tip of the iceberg and Government might be losing funds that are in critical supply to fraudulent activities by officials. The Committee recommends Treasury to come up with a risk management framework by 31st September, 2016, which will allow close monitoring of high risk areas and curb losses through fraudulent activities.

4.2.3.2   Given the central role played by the Accountant General’s Office, the Civil Service Commission should, by 31st September, 2016, fill in the critical vacancies occasioned by this incident. The staff is critical in ensuring that audit recommendations across line Ministries, parastatals and local authorities are acted upon.

4.2.4 Use of cash before banking in violation of Treasury Instruction 0454

The Auditor General observed that cash amounting to $20 035 was expended before it was banked in violation of Treasury Instructions. Given that Treasury is charged with the crafting of these guidelines, it is unfortunate that they were found flouting their own rules. Fraudulent activities may also be perpetrated by Ministry officials and cash may not be accounted for. The Accounting Officer admitted that failure to bank receipts in full was not procedural and in violation of standing regulations. He assured the Committee that the use of cash before banking had been stopped following the observation raised by Audit.

4.2.5   Documentation of systems by the Accountant General’s Office: failure to review Treasury Instructions after the introduction of the multi-currency system.

The Treasury Instructions, which give guidelines to user Ministries on how to Account for public funds have not been updated since the introduction of multi-currency system. In the absence of documented guidelines the integrity of the financial system is compromised as public finances will be exposed to arbitrary decisions and in some cases criminal activities. The Accountant General admitted that the Treasury Instructions were outdated but pointed out that they were still relevant. As a corrective measure, he advised the Committee that a new set of Treasury Instructions had been drafted and would be finalised after receiving feedback from all stakeholders during the second quarter of 2016.

4.2.5.1   The Committee recommends that the new regulations should be operational by 31st June, 2016 as the Ministry indicated.

4.2.6 Failure to revalue Government assets from the Zimbabwean dollar to the United States dollar

Government assets have not been revalued from the Zimbabwean dollar to the United States dollar resulting in the non-disclosure or distortion of the true value of the assets in the Government records. The Accountant General advised the Committee that the issue of revaluation was not because of a lack of capacity, but a matter of accounting principle where the Government of Zimbabwe was still using cash basis accounting.

4.2.6.1    Given that some Ministries and Government departments had non-current assets at the introduction of the multicurrency system, the Committee recommends that Treasury should by 31st September, 2016, provide guidance to fund managers to enable them to revalue non-current assets that were in Zimbabwean dollar currency.

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