Government has lost almost $1 billion since 2009 through lack of accountability and illicit capital flight among various State departments, a report compiled by the Zimbabwe Coalition on Debt and Development has revealed. The ZIMCODD report was done based on the Auditor-General’s reports since 2009 which revealed that the current illicit financial outflows in Zimbabwe have been rampant.
“The cumulative losses through lack of accountability could not be quantified per year per line ministry because of inadequate information on undervalued assets, absence of supporting documents, unexplained variances between line ministries’ expenditure accounts and Treasury expenditure accounts. “However, the analysis noted that the amount of money lost during the period translate into not less than $1 billion,” said the report.
Flouting laid down procurement procedures and tender processes contributed to loss of public revenue during the period while inconclusive audits caused by labour disputes and working capital issues have tarnished the process of proper accounting of public resources. The report said a pointer to the total amount lost is the case of the 2013 Ministry of Finance and Economic Development statements where take on balance and closing balance had a variance of $5 million.
Line ministries balances and Treasury balances during the period had a variance of $324 million while line Ministries’ Appropriation Account expenditures and Treasury total expenditure had a variance of $31 million.
Undocumented loan write-offs amounted to $5 million while non-recovered debt repayment for a private company amounting to $11 million was recorded during the period. The report said some parastatals are not operating at full capacity while delays in the appointment of both parastatals boards and chief executives also left no room for strategic plans making it difficult to monitor progress.
Absence of approved policies for example Debt Policy, Information Technology Policy, Procurement Policy, Accounting Policy and Procedures Manual also hampered smooth operations in public finance management according to the report. Debts and failure to abide by debt collection policy also led to loss of funds due to failure to recover debts and misstatement of financial statements.
The report added that public entities have been run by management employees with expired contracts of employment and short term contracts curtailing policy direction and strategic decisions. “Some institutions have no substantive appointments for key management posts (for instance Financial Accountant, Management Accountant) made for the whole period under analysis, rendering public funds management weak. Absence of performance appraisals for employees has made identification of training needs difficult.
“Financial outflows due to legal proceedings and legal cases not disclosed as contingency liabilities as required by International Accounts standard number 37 dominated public entities,” said the report. The report highlighted that the absence of performance appraisals for employees made identification of training needs on finance management difficult.
“There is therefore need for a focus on strengthening effective governance in public finance management since weak and poor governance is the major contributor to financial outflows.”