HomeBusiness DigestAudit exonerates Maredza

Audit exonerates Maredza

POWER struggles at the Small Enterprises Development Corporation (Sedco) have taken a new twist after an internal audit cleared Claude Maredza of any wrongdoing. This followed his suspension as Sedco general manager in October. <

The November 9 internal audit, which was prepared by Compassion Hondonga, Sedco’s finance and administration manager, is completely different from the one done two days earlier by Simbisai Matema, Sedco’s chief internal auditor (SCIA) on the instructions of the board.

Hondonga’s report was sent to Phillip Mutasa, Sedco’s chairman of finance and audit committee.

Matema’s report was not signed but covered issues pertaining to cash, lines of credit, expenditure budgets and issues of fuel bought from Hughber Petroleum.

The report has also been given to Mutasa. Matema’s report said there were no penalties raised for late payments or arrears and that some approved amounts were above limits.

“In a couple of instances highlighted on the schedule the amount approved and disbursed was above the approval limits granted by the board,” Matema said in the report.

“One client, Mafios Dickson, signed a contract to repay $840 million ($450 million principal and $390 million profit – sic) every 48 hours. He never came to honour the agreement. In a couple of instances shown on schedule, no security has been pledged for the loans.”

Maredza was suspended last month following allegations of exceeding board cash limits and misuse of fuel allocations.

The board will tomorrow hold a disciplinary hearing for Maredza. Maredza has however said he will not turn up for the hearing. Matema’s report said Sedco diverted funds meant for infrastructure development, including Operation Garikai/Hlalani Kuhle, to finance the purchase of a Mercedes Benz priced at $3,08 billion, $5,234 billion for order finance and $1,848 billion for fuel.

Matema’s report said the institution had incurred $639 299 612 in public relations and marketing consultancy fees when it has a marketing and public relations executive.

“The business analyst-in-charge of Bindura has been staying in a hotel . since her transfer to the branch in May on corporation expense. The corporation rules allow an officer to stay in a hotel for 14 days,” the audit said.

“In requiring circumstances, it allows a further 14 days but the corporation pays 50% of the hotel expenses. The corporation has been paying 100% for the period of 93 days from May 1 to date, including T&S (transport and subsistence) from 9/10/05-31/10/05 ($18 200 000).”

However, Hondonga’s report has since dismissed Matema’s findings, saying they did not reflect the true state of affairs at Sedco.

“It is not my intention to point accusing fingers at anyone involved in this exercise, but the attempt to convince the Sedco board with figures that are both inaccurate and out of date appears to have been a result of lack of familiarity with correct audit procedures,” Hondonga said.

“Reports of this nature, of necessity, need to be free of emotion and malice and should aim at providing unedited accurate information as they are often the documents used by potential and existing stakeholders in assessing the investment potential of the organisation.”

Hondonga said reports of spending beyond budget limits were inaccurate in that the corporation’s expenditure reflects a positive variance of $5 billion.

“I repeat that my signature cannot be party to the original document and since it took two weeks to prepare the report, it would be virtually improbable that I could comment on the document in the twenty four hours you require me to, in time for submitting it for your 14:30 hours meeting on 10 November 2005,” Hondonga said.

“Submitting my signed comments can only be done after due scrutiny of the original document and does not, as an exercise, constitute a revision of the Sedco chief internal audit (SCIA) report per se.”

He said “our collective moral obligations” in such exercises requires selfless transparency and not the selective auditing that was the basis of SCIA’s contentious report”.

Hondonga refused to comment on the fuel usage by the general manager arguing that it was the “exclusive preserve of managers to account for usage under their stipulated allocations and limits” as specified in their contracts.

He said the audit reflects telling omissions of details that slightly “tip it in the direction of selective audit”.

That the Sedco audit report veers off course by over $1,4 billion speaks volumes about the manner in which it was prepared, he said.

“I wish to repeat that the chief internal auditor did concur with the acting general manager (Stewart Marambanhaka) in preparing the report while by-passing my office and it is for this reason that the above details were carelessly left out.”

Maredza has since written to Mutasa stating that he will not report for the disciplinary hearing scheduled for next Tuesday.

The letter has been given to all board members.

“The disciplinary hearing is a direct result of information gleaned from the above audit report which does not carry signatures of authorship or evidence of corroboration,” Maredza said.

“The legal implications of this development are axiomatic. In the light of the above, it is imperative that your board be informed that the disciplinary hearing cannot take place before I have access to the appropriate audit report which is authenticated and corroborated.”

Recent Posts

Stories you will enjoy

Recommended reading