Multi-million dollar scandal rocks Zinara

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The deplorable state of the country’s road network is well documented and the first candidates for PPPs would be arguably Zinara and the NRZ.

AN external forensic audit has uncovered massive corruption, tax evasion and corporate governance rot at the Zimbabwe National Roads Administration (Zinara), in which the government agency lost millions of dollars through wanton financial waste and unsubstantiated payments to board members and senior company officials.

BY ANDREW KUNAMBURA

Officials at the parastatal have kept the report, which was compiled by audit firm Grant Thornton Zimbabwe, under wraps.

The audit revealed senior managers systematically creamed off the road fund through allocating themselves huge, unapproved allowances and bonuses — which were, in some instances, paid several times in a year.

The rot picked up by the auditors spanned seven years from the time Frank Chitukutuku was chief executive officer of the parastatal, until his resignation in 2016.

The auditors accused Chitukutuku of presiding over unprocedural recruitments of senior staffers at Zinara, saying he routinely single-handedly hired senior staffers without following human resources stipulations.

Zinara bosses also prejudiced Treasury of millions of dollars through tax evasion, the audit said. This comes as former acting chief executive Moses Juma was on Tuesday jailed for an effective two years for corruption at the Harare Magistrates Court. Juma was first arrested in 2016, but was released from police custody at the instigation of former vice-president Phelekezela Mphoko, who stormed a police station and demanded his release.

The report in Zimbabwe Independent’s possession details systematic corruption at the state enterprise. Transport minister Joel Biggie Matiza on Wednesday fired the 12-member Zinara board over, among other things, conniving with management to sweep the findings of the audit under the carpet.

In a letter to Zinara board chair Wilfred Ramwi notifying him of government’s decision to fire the board, Matiza said: “I have noted with concern that, among other shortcomings, the board had failed to act on the findings of the forensic audit report; Zinara has serious corporate governance gaps both at board and senior management levels which have resulted in the organisation losing focus on its core mandate as provided in the Roads Act, which is exemplified by the focus on using financial instruments to fund Zinara projects instead of putting in place effective measures to maximise revenue.

“The board’s lack of effectiveness cannot be condoned as it militates against the sector’s reconfiguration to the national economic and social turnaround strategies. To that end, your term of office as board member of Zinara is terminated with immediate effect.”
The board, earlier in June this year, suspended (Zinara) chief executive Engineer Nancy Masiyiwa, accusing her of harassing senior staffers, including an allegation that she called one of the senior managers at the parastatal a “satanist”.
Masiyiwa, through her lawyers, however, argues she is being persecuted for fighting corruption at the institution and demanding the release of the audit report.

In an audit observation memo accompanying the report, which is dated December 2016, the auditors chastised management for consistently failing to justify its excessive outlays. It recommended immediate action, an obligation which it says management has failed over the years to do.

The audit report accuses the previous Zinara board chair Albert Mugabe and Chitukutuku of milking the authority. Mugabe currently chairs the Traffic Safety Council of Zimbabwe board.

The audit found out that the Mugabe-led board was getting board fees without withholding tax deductions, thereby prejudicing the Zimbabwe Revenue Authority (Zimra) of large amounts of revenue. Board members also received allowances for attending meetings and workshops, for which they were not supposed to get such payments.

“Zinara was paying board members allowances for attending other meetings such as functions, workshops or conferences using approved board sitting fee rates for the period January 2011 to February 2016,” points out the report said, adding that board members received board fees for attending an induction meeting in Victoria Falls on September 5, 2014.

“Board members were given two allowances for the same day, one as board sitting fees and another as board induction allowance,” it says.

Mugabe left the resort town US$600 richer, exclusive of other payments like board committee fees and fuel allowances, according to figures accompanying the report.

The audit also found out that a payment of US$23 518 was made to a company called Solution Centre for the purchase of iPads for the 12 members of the board despite the fact that they were not part of their benefits according to government stipulations.

In the same year, auditors discovered, board members received Christmas humpers worth US$10 000 in total. This was also not part of the stipulated benefits. The audit further found out that a tax assessment covering the years 2009 to 2015 was issued in relation to taxes which were being accrued by Zinara in contravention of the Income Tax Act. The assessment found out that employee allowances which were not being processed through the payroll amounted to US$2,2 million, taxes on suppliers which were not withheld and remitted to Zimra to the tune of US$15, 5 million and income and value added taxes totalling US$43 million.

The report reveals that Zinara was operating without a human resources policy, exposing that its staff recruitment and upgrading system was open to manipulation by management.

Capitalising on this loophole, the audit report says, Chitukutuku made himself the sole recruiter of senior staffers at Zinara. He interviewed staffers by himself.

The audit found that, for instance, Chitukutuku individually interviewed Zinara director of operations Precious Murove and gave him the position of procurement officer despite the fact that he did not have suitable qualifications.

“Mr P Murove joined Zinara in August 2009 as a procurement officer. Mr Frank Chitukutuku, the former CEO of Zinara was the only interviewer. Mr Murove’s qualifications at the time were; a certificate in stores and supplies management from the Airforce of Zimbabwe and a Diploma in Biblical studies from Africa Multination for Christ College. The certificates were not availed for inspection and there were no copies in his personal file,” the report says.

Notwithstanding his lack of qualifications, Murove quickly rose through the Zinara hierarchy, earning a promotion as administration human resources manager within 12 months. Three years later, he became Zinara’s director of administration on the strength of a fraudulent qualification, the audit notes.

“At the time of the promotion to the position of director of administration, Mr Murove had attained a diploma in business administration from Azaliah University in New Mexico (USA). A list released by the New Mexico Higher Education Department on their website dated June 2014 shows that Azaliah University was closed in June 2012,” the report notes.

Chitukutuku also interviewed the now incarcerated Juma and gave him the position of planning and technical director.

“The interviews were carried out by the CEO Mr Frank Chitukutuku as the only interviewer and there was no evidence of the involvement of the other personnel in the interview process,” the auditors said.

Six other senior employees were recruited in the same manner. During his six year tenure as Zinara CEO, auditors further noted, Chitukutuku received huge allowances not provided for in his contract of employment.

The allowances, which include a US$900 monthly housing allowance; a monthly representation allowance of US$450 and an inflated cell phone allowance of US$150 per month, against the US$120 stipulated in his contract of employment.

A review of the payroll summaries by the investigators also showed that in some instances, top managers got annual bonuses twice per year.

For instance, in 2012, eight senior managers cost Zinara US$79 200 in bonuses paid in October and November of that year, with Chitukutuku pocketing US$20 400 while others got US$4 200 each. The rest of employees did not get.

The following year, the same group of managers received bonuses three times in March, July and November, costing Zinara US$113 494.

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3 thoughts on “Multi-million dollar scandal rocks Zinara”

  1. Funwell Masikati says:

    The ZINARA scandal is just a tip of the iceberg. It’s a daily occurrence in most public institutions in Zim. What’s needed now is re-orientation of business at all public institutions. Zim must hire retired civil servants from countries such as South Korea and Japan which are do not tolerate corruption. Such civil servants should run public entities for some time say two years. The regulations must also be fine-tuned so that those who commit corruption are swiftly and mercilessly dealt with. South Koreans arrest senior politicians even presidents if they start showing corrupt tendencies.

  2. Spif says:

    Zimbabwe should emulate China by making corruption punishable by DEATH.

  3. tatenda says:

    The very people that are corrupt are the same that have run down this country and then they feed us on the propaganda that sanctions are the cause of Zimbabwe’s plethora of problems…who suffers at the end of the day… the poor man on the streets. If they dare hold these corrupt officials to account more corruption at the ballot box and the courts. My heart bleeds for Zimbabwe.

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