The rot in Zimbabwe’s Ministry of Transport

4.1.8 Unpaid invoices for Department of Roads

The Audit observed that the Ministry had unpaid invoices amounting to $7 562 005 (2012: $8 331 008) for services rendered. There was no budget to clear the outstanding debts. As observed in previous audits, there was no system in place to monitor timely payment of creditors exposing Government to potential litigation by creditors. The Permanent Secretary informed the Committee that the issue of outstanding debts was a big challenge for the Ministry and that it has been consistently in discussion with Treasury to disburse funds to settle outstanding obligations. In 2016, the Ministry was given US$2 million to settle the outstanding obligations and for 2017, there is a budget allocation of US$2 536 000.  Due to tight fiscal space, the Ministry indicated that the Treasury had in situations where the Ministry was facing litigation, requested ZINARA to meet the Ministry’s obligations.

The Committee noted with concern that the budget allocations for the Department of Roads are not taking into account the long outstanding debts going as far back as 2012. There is a risk that the Ministry would face litigation and Government would lose out more. It is also worrisome to the Committee that the Ministry continue to incur additional debts regardless of its indebtedness which is worsening the situation. There are therefore poor budgetary controls within the Ministry.

Though the Ministry indicated that payments were made on the first come first served principle, there were situations where those who were contracted late were being paid ahead of those who came in earlier. The Ministry said in such cases, there were threats of litigations. In the absence of a transparent system of paying creditors, this could be a source of corrupt practices.

4.1.8.1 The Committee recommends that the Ministry should, by 31stAugust 2017, engage Treasury on the possibility of taking over the long outstanding debts by the Ministry. Going forward, the Ministry should operate within the approved budget.

4.1.8.2 The Ministry should by 30th September 2017 put in place a transparent system of paying its creditors.

(242 VIEWS)