Chinamasa under fire

4.3.6    Revenue Collection and Debt Recovery: Farmers’ World Debt worth $11 833 433

The Government paid a total of $11 833 443 to China Exim Bank in respect of a debt owed by a private company called the Farmers’ World after it failed to meet its obligations. The Auditor General failed to establish action taken by Treasury to recover the money from beneficiaries of the farm equipment, and the role of the Farmers’ World in recovering the outstanding amounts. Loan agreements and other supporting documents pertaining to the China Exim Bank and Farmers’ World loan facility were not availed for audit examination. Furthermore, the Committee noted under Ministry of Agriculture, Mechanisation and Irrigation Development that there was another loan advanced to Farmers World in 2014 amounting to $11 566 00 which brings the total figure to $23 million . Again there were no loan agreements relating to the debt.

In the absence of contractual documentation, there is risk that Government may fail to recover the loaned amounts thereby prejudicing public funds. It was said the loans were paid on behalf of beneficiaries of agricultural machinery, equipment and implements. The Accountant General advised the Committee that the loan was inherited from RBZ debt and payment to China Exim Bank was important for Government to retain the country’s credit worthiness with the Bank and ensure continued lines of credit. As part of efforts to recover the funds from Farmers’ World, the matter had been referred to Attorney General Office for guidance.

4.3.6.1   In the Committee’s view public resources cannot be used to meet obligations of a private nature and as such, Government must, with immediate effect, institute measures to recover the debt from either Farmers’ World or from beneficiaries of farm machinery and implements. Treasury should by 31st September, 2016, explain fully to the Committee why Farmers World was advanced the latter loan reported in 2014 when it was failing to pay back the initial loan and also report on progress made towards recovery of the debt.

4.4    STATEMENT OF RECEIPTS AND DISBURSEMENTS 2013

4.4.1   Variances between line Ministries returns, Consolidated Treasury return and PFMS figures

Comparison of the balances disclosed in the Treasury Consolidated return and line Ministries returns showed significant differences as follows; take-on balance had variances of $149 627 463, collections differed by $15 776 749, payments to the Main Exchequer Account had a difference of  $15 557 026 and payments to ‘Other Accounts’ had a variance of $383 425 686. Furthermore, total Disbursements to the Main Exchequer Account by line Ministries differed with balances in the PFM system by $28 510 787.

The Statement of Receipts and Disbursements was rendered inaccurate and unreliable as a result of unreconciled variances. The Accountant General attributed failure by officers to produce accurate returns, to lack of training. He advised the Committee that accounting staff in his department were trained during the year 2015 and the variances were reconciled later on. The Audit Office would verify the evidence during the 2015 audits.

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