4.1.3.1 The Committee recommends the Treasury shouldimmediately issue the necessary guidelines on the setting up of Audit Committees by Ministries.
4.1.4 Absence of a Risk Management Policy (2014)
In violation of Section 44 of the PFMA, the Ministry did not have a documented and approved risk management policy. As a result, risk assessments were not carried out. The Act requires Ministries and other public entities to establish and maintain an effective, efficient and transparent system of risk management framework. This will assist the Ministry in identifying and responding to material risks effectively.
The Ministry acknowledged the audit observation and indicated that the Risk Management was now in pace. It also appointed a Risk Champion responsible for overseeing the implementation of the policy. It was working on a Fraud Risk Policy which is part of the Risk Management Policy. The Committee expressed its satisfaction that the Ministry had taken appropriate action to address the audit observation.
4.1.5 Management of Government Programmes- Milano –Expo Contract (2015)
Zimbabwe accepted an invitation from the Italian Government to participate at the Milano-Expo 2015, a universal exhibition organised by Italy. It was held on the theme ‘Feeding the Planet, Energy for Life’ and dealt with the right to health, safe and sufficient nutrition for the entire planet, environmental, social and economic sustainability of the food chain as well as the safeguarding of food taste and culture.
The Ministry awarded a contract for €50,400 (US$56 952) on May 6, 2015, for kitchen management services and catering of food and beverage to Jihad El Badaoui (Jihad) for the Milano-Expo. The contract was made without following the tender procedures in contravention of the Procurement Regulations, Statutory Instrument 171 of 2002. Without going through the tender procedures, it could not be ascertained whether the Ministry got fair value from the contract. The service provider could inflate prices in the absence of competitive bidding resulting in a drain on the Ministry’s resources.
Furthermore, the revenue received return that was submitted for audit indicated that revenue amounting to $49 980 (€36 740) was realised from sales at the Milano-Expo. However, the Ministry did not avail any supporting documentation in the form of receipts, cashbooks or registers for sales made and expenditure incurred in Italy on this programme. In the absence of financial records, transparency and accountability in the use of public resources may be compromised and funds may be misappropriated.
Mrs. Shonhiwa acknowledged the observation and highlighted difficulties the Ministry encountered in securing a service provider given the strict Italian rules and regulations. The Ministry brought to the attention of the State Procurement Board the peculiarities in terms of engaging a service provider at the expo. The cash receipts were said to have been retained by the Business Partner for payment of taxes to the Italian Government in accordance with the Italian Tax Regulations.
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