The Sunday Mail
Tinashe Farawo
GOVERNMENT has begun streamlining its accounting systems after years of failure to adhere to basic rules enshrined in the law and public accounts procedure manuals, a situation that opened floodgates to abuse of State resources.The Sunday Mail has gathered that accounting systems in most ministries and State companies were in shambles, resulting in some officials taking advantage to loot and misappropriate resources.
According to the latest report by Auditor-General Mildred Chiri, one of the major reasons why there has been rampant abuse of resources in ministries, Government departments and public companies, is poor accounting systems
Ms Chiri has on several occasions noted with concern failure by responsible authorities to observe internal control mechanisms, record keeping and diversion of resources from fund accounts to parent ministries.
According to a memorandum from the Ministry of Finance and Economic Development to the Civil Service Commission, the Office of the Auditor General, the Judicial Service Commission and Clerk of Parliament; all financial submissions must be in line with the Public Management Act.
The memorandum followed concerns raised by the Auditor-General’s office that some financial statements were not consistent with International Finance Standards.
“…Section 2 of the Public Finance Management Act defines financial statements as follows; a statement of financial position; a statement of comprehensive income; a statement of cash flow; audited or unaudited monthly, quarterly and annual financial accounts; and any other statements that may be prescribed,” read part of the memorandum.
“The office of the Auditor-General has advised that some of the submissions to that office are not consistent with the above terminology
“In view of the above, you are requested to ensure that all financial statements submissions are in line with the Public Finance Management Act definitions as indicated above.”
Information gathered by The Sunday Mail show that most assets recorded in Government registers are non-existent.
The majority of the assets still attach their book values as there has not been calculation for depreciation or a physical audit to verify if they are still in existence.
According to a Government ministerial internal memo seen by The Sunday Mail, depreciation of fixed assets like motor vehicles will now be calculated at 20 percent per annum.
“Depreciation of fixed assets has been applied on straight line basis as follows, motor vehicles 20 percent per annum, fixtures and fittings 25 percent, furniture 25 percent and radio, television and other assets at 50 percent,” reads part of the memo from the Ministry of Primary and Secondary Education to Government school bursars and accountants.
The internal memo further read: “For uniformity purposes, provinces are advised to hold workshops with school bursars and district accountants before the preparation of the final accounts.
“It would be appreciated if these changes are incorporated in our final accounts for submission to the Auditor-General and Ministry of Finance and Economic Development.”
“In compliance with the Generally Accepted Accounting Practices and in line with the current International Financial Reporting Standards (IFRS), the Ministry is migrating from the old format of presentation of financial statements.”
It has been established that school bursars and accountants from Harare Province will this week gather in Mutare for a workshop in an effort to improve Government schools’ accounting systems.
The memo by the education ministry is in response to a directive from the finance ministry.
Primary and Secondary Education Minister, Dr Lazarus Dokora, although confirming the development said, “I think you need to talk to the permanent secretary because those are operational issues.”
Primary and Secondary Education secretary Dr Sylvia Utete Masango confirmed the development but referred further questions to the director of finance in the ministry, Ms Betty Wenjere.
“We have received a directive from the Ministry of Finance on the new accounting system in line with International Financial Reporting Standards (IFRS), what we have done is to operationalise that police framework to our departments,” said Ms Wenjere. In her latest report, Auditor-General Chiri noted that many Government departments have been found wanting in late submission of fund accounts and management of Government property and resources.
The report also stated that some ministries were not reconciling differences between figures in the sub-paymaster general accounts and the public finance management system.
In 2014, the Auditor-General said treasury paid about $180 million to service providers as direct payments through ministries, but “most of the direct payments to service providers were not supported by invoices and receipts”. She said the failure to raise invoices compromised the correctness of the expenditure figures.
Some ministries are cited as having failed to keep full financial records as required to foster accountability and transparency. Others have failed to submit departmental assets certificates to the Government auditor
“In some instances, the master assets registers and property registers were not being updated as most of the procured assets were not included in the registers. Furthermore, some fund’s assets were not revalued after the dollarisation of the economy and as a result the value of the assets was not included in the financial statements,” noted Ms Chiri in her report.
Government is said to be owed amounts as high as $95 million by some ministries due to weaknesses in debt recovery systems.
The debts came in the form of outstanding travel and subsistence advances and revenue from rentals, survey fees and surcharges, investments locked in financial institutions and loans advanced to local authorities, highlighted Ms Chiri.
Government has been facing increasing costs at a time of depreciating revenue. The situation has resulted in challenges such as late payment of staff salaries.
