The Sunday Mail
Edmore AM Ndudzo
There are signs of gross financial mismanagement at the City of Harare. According to a report on local authorities for the year ended December 31, 2015 by the Auditor-General, the last audited financial statements at hand for Harare are those relating to the year ended December 31, 2012. That is about three-and-a-half years behind schedule, a very unacceptable scenario. This was about the same situation the city found itself in when I joined them in 1983. Then the situation had been mainly occasioned by two factors. There has been a massive exodus of the white skilled and experienced professional accounting and finance staffers who had hitherto monopolised the middle and top management in the City Treasurer’s and other departments.
The situation was made worse and by teething computer software and hardware problems.
The white staffers felt threatened and uncomfortable by our gaining Independence in 1980.
The ICT-related problems seem to have gotten worse and unresolved, going by the Auditor-General’s recent report. There is an apparent and deliberate attempt by all concerned to work outside the BIQ (Enterprise Resource Planning Software system modules), by use of say excel spreadsheets, which most staff appear more comfortable with and therefore use extensively.
Unfortunately these spreadsheets or other such software packages in use are easily susceptible to manipulation, thereby exposing the city to all manner of dubious and corrupt data entry and creation of databases that are neither accurate nor credible.
Transmission of data between, for example, district offices and Rowan Martin Building, is still being done on discs which can be easily be corrupted before or on entry into the main database.
So this fairly simple and easily resolvable matter of computer connectivity, within one city, is still an issue 23 years after I left the council, and this is to my complete and utter surprise and discomfort and dismay as a ratepayer.
From the 2015 Auditor-General’s report, I will highlight a few areas of concern relating specifically and having a bearing on financial matters at the City of Harare.
It was mentioned that the Harare City Council did not satisfactorily reconcile its cash-book (financial statement balance) overdrawn balance of some US$208 430 777 as at December 31, 2012 to the combined bank statements balances of only US$7 590 828. This in effect leaves an inadequately explained variance of US$200 839 949.
To the uninitiated, this creates a wrong impression of US$200 million missing and unaccounted for, which fortunately is not the case here.
Alarming also and discomforting was the mention in the same report that for the year ended December 31, 2012, of about 163,5 million cubic litres of water purified and pumped from Morton Jaffray Water Treatment Plant, only 71,6 million cubic litres were billed for at Rowan Martin Building’s computer centre.
These are facts and figures. The volume of water billed constitutes only about 40 percent of the treated total.
What a waste of resources given that it takes about nine different and mostly expensive chemicals to treat the water given the pollution at Lake Chivero and Lake Harava (Darwendale).
The water lost could only be attributable to the following:
(1) Water lost in transmission from the treatment plant and distribution reticulation system through pipe bursts and leaks;
(2) Illegal and, therefore, unrecorded water connections;
(3) Under-assessments or underestimation of water consumption and usage, mainly as a result of malfunctioning or faulty, old and unreliable water meters; and
(4) To a very limited extent, evaporation of water from reservoirs, particularly in the relatively hot season periods.
Procurement of both goods and services done corruptly or while ignoring tender and/or other laid down procedures was also highlighted in the Auditor-General’s report.
I have no doubt that the city is haunted by lack of credible and up to date databases which lead to incomplete and inaccurate billing of rates and other municipal service and non-service charges and rentals.
All these conspire to frustrate efficient revenue collection, management and debt recovery, among other expected cash inflows.
Given the inordinate delay in conducting and publishing the city’s audited financial statements, the Minister of Local Government, Public Works and National Housing has ordered forensic auditing of all City of Harare non-core commercial and joint venture activities and entities.
Without pre-empting their findings and those likely to emerge from subsequent external and internal audits, but just to buttress my own emerging suspicions of the city’s financial management situation, I wish to cite and make reference to my own recent experience.
One of my sisters, who with her husband and family are now domiciled in the US, asked me to make an inquiry as regards their rates and water statements for one of their properties.
She said she had not received water and rates statements for a long while.
In the event that there was a huge outstanding bill, she intended to take advantage of the 30 percent discount on arrears the council was offering for full settlement.
She feared suffering the same predicament which our brother, now in Australia, had suffered when his property was threatened with attachment when the tenant renting his house vacated after all along falsely and dishonestly giving the impression he was up to date on his rates and water payments.
Having worked for the city for more than 10 years, I was confident that my sister’s inquiry was one that was very easy to sort out – only to encounter surprise and shock.
For starters, just to get the account number was a mammoth task.
The details were very difficult to locate, and the property for all intents and purposes seemed to have disappeared into thin air.
Having managed to get the property details, the account number was nowhere to be seen. After much investigations, the account was eventually located only to then discover that it had been terminated in May 2014.
The then outstanding balance appeared to have been written off at the same time other such balances were ordered to be written off at the orders by the Local Government Ministry and that was that.
My own personal rates and water account had — much to my relief — also benefited from those write-offs but my account was subsequently reactivated. The same happened with my brother’s account. No such thing happened with my sister’s account.
Given these rather bizarre developments, I was politely told by my former workmates at City Treasury to wait for a written and comprehensive explanation as to what may have happened to my sister’s account.
I am not hopeful of getting a plausible explanation and I think I may have, rather inadvertently, opened a can of worms.
It is quite possible and not beyond the stretch of imagination that a number of accounts may not have been reactivated after the write-offs; in which case many supposed ratepayers are not being billed and therefore not paying rates, water and municipal charges. Add to this newly built properties which may not have been captured in the Property Roll and in the main system (the BIQ), the situation can be unsettling.
But it may explain to quite a large extent the cash flow problems bedevilling the city, more so given that salaries of municipal staff are currently running many months in arrears, not to mention other creditors both statutory and ordinary.
I hope and pray I will be proven wrong.
Edmore AM Ndudzo is a chartered accountant and certified public accountant. He was the first black City Treasurer of the City of Harare, and writes in the national interest as a citizen and concerned ratepayer
