HomeLocal NewsCouncil loses millions through fraud

Council loses millions through fraud

THE Gweru City Council lost millions of dollars due to fraud, embezzlement and misappropriation of funds by councillors, according to a special investigation audit report on the council dated July 27, 2015.

Hazel Ndebele

The audit report was the basis on which Local Government minister Saviour Kasukuwere suspended all 18 Gweru councillors, including mayor Hamutendi Kombayi.

The audit report reveals that councillors spent huge sums of money on travel, personal vehicles for middle managers, while some payments were made without receipts to prove the transactions.

Local government internal auditors carried out the audit following a request from former Local Government minister Ignatius Chombo after complaints from stakeholders over alleged maladministration, corruption and abuse of funds by councillors and officials.

Chombo was assigned to the Home Affairs ministry shortly after a team was assembled to investigate.

The team, among other tasks, investigated allegations that council sold 400 cattle to Kombayi, town clerk Daniel Matawu and some councillors at “very low prices”.

The audit established that council misappropriated US$313 419 after purchasing personal vehicles for its middle managers using US$280 000 from the estate account, as well as buying laptops and training councillors at a cost of US$31 544.

“Council also paid MDC-T party expenses to the tune of US$1 875 to host party leader Morgan Tsvangirai at Antelope Park using ratepayers’ money,” reads the report.

The report says council incurred wasteful expenditure to the tune of US$617 798,48 after being overcharged by US$365 028,98 for survey fees by Terra Survey Mandaza. The department of the Surveyor General Zimbabwe believes the charges were inflated.

Council, according to the audit, paid US$45 520 to the Regency Fairmile Hotel for meals and refreshments without documented official requests.

In addition, council paid US$155 812 for travelling and subsistence allowances to its councillors who undertook training workshops not relevant to their duties, and which were managerial in nature. Examples given included the mayor attending an accountants’ conference and councillors attending fraud investigation workshops.

Council also paid US$50 667 for travel and subsistence allowances to councillors and officials for extended trip days.

On governance issues, Gweru Council was said to be incurring high litigation costs which amounted to US$308 181.
“For instance, US$40 000 was paid to Messrs Danziger & Partners legal practitioners in the matter between City of Gweru and the former Chamber Secretary R Masinire and the matter is not yet resolved,” the report says.

Also, the council was said to have defied a ministerial directive by, for example, paying employees using the 2013 salary scales in defiance of the ministerial directive dated October 8, 2014, which required council to rationalise salaries so as to promote service delivery.

Councillors, the report says, were buying stands “at a reduced rate of 60% against a directive form the ministry to sell them at full market cost to councillors”.

Councillors bought stands in Kopje low-density suburb at US$3 per square metre instead of about US$25 per square metre.

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