4.2.2 Poor recovery of debts (2014)
The Audit observed an outstanding debt amounting to $$677 122 and a total amount of $676 306 (99.8%) had been outstanding for more than two years, with some balances back dating to 2009. This shows that the Ministry had serious challenges in recovering of debts and risk loss of revenue for the Fund.
The Ministry acknowledged the observation and highlighted that the figure of $677 122 was mostly made up of debts from local authorities which included rural district councils. Part of the debt was for Mutare Border Timbers which was under judicial management. Intense follow ups were done and reaped very few positive responses. Few of the local authorities made payment plans. Frantic efforts were still being done to clear the outstanding debts but due to the prevailing economic challenges, it has been fruitless. As regards the Border Timbers’ debt, the Fund had attended creditors meetings where debts were ranked and are waiting for the court’s decision. Evidence availed to the Committee showed that outstanding levy debtors were handed over to the Civil Division through a letter written on July 20, 2016. A letter was also sent to the Ministry of Local Government, Public Works and National Housing on July 11, 2016 seeking assistance in the recovery of the outstanding debts from Local Authorities.
4.2.2.1 Recommendation
In relation to the amount owed by Mutare Border Timbers, the Ministry should vigorously pursue the debt with the judicial manager and bring the matter to closure by 30th April 2017.
4.2.2.2 In view of the challenges faced by local authorities, Government should closely look at the objects of the Fund vis-à-vis the challenges facing local authorities and may consider taking over the debt.
4.2.3 Unidentified Deposits (2013)
The audit observed that the Fund was taking long to clear the figure for ‘Unidentified Deposits’ which amounted to $937 423 as at December 31, 2013. These were direct deposits in the Fund’s bank account for levy fees but could not be directly linked to specific clients. By the time of concluding the audit, only $807 427 of this amount had been cleared and receipted. This will result in debtors being misstated.
The Ministry informed the Committee that unidentified deposits arise from deposits that have insufficient details for issuance of receipts despite the fact that the Fund has customized deposit slips. These deposit slips were now available at all CBZ branches countrywide. The $937 423 unidentified deposits for 2013 were cleared. However, the issue recurs every year but the figure for the unidentified deposits has been reduced significantly. The Ministry pointed out that the Bank had indicated that they have challenges with RTGS transfers made through other banks and the process takes a bit of time since most of the deposits will be in archives.
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