THE Auditor-General’s office has, once again, tabled its reports to parliament, raising issues that continue to dog the public sector for years.
The reports on the financial year ended December 31, 2020 reveal the same problems and it remains a cause for concern that the government is failing to decisively deal with corruption.
According to Auditor-General Mildred Chiri’s report on state enterprises and parastatals (SEPs), most of the entities are yet to align their practices and policies with the provision of the Public Entities Corporate Governance Act, which established the Corporate Governance Unit.
She noted that out of 146 issues she reported in her report 120 relate to governance problems, while 26 others relate to revenue collection, employment costs and procurement.
“I followed up on my prior year — 2019 — recommendations and noted significant improvement for the entities audited, forty-six (46) out of the sixty-nine (69), that is 76% of these recommendations were implemented, twelve (12) remain outstanding, and eleven (11) were being followed up as the audits were in progress,” she said.
“Governance issues reported in the current year are in respect of weak internal controls, undocumented joint venture arrangements, unsupported expenditure, absence of bank reconciliations, non-compliance with income tax provisions and other issues around risk management arrangements.”
Chiri added that audit findings warranted the attention of management and those charged with governance.
Observers and academics, who have written extensively on privatisation and corporate governance in SEPs, argue that this is a political minefield with corruption and cronyism reigning supreme.
Margaret Mutsamvi, the Economic Justice for Women Project director, said the Auditor General’s report reflects high levels of abuse of public funds at the expense of the welfare of Zimbabweans.
“It is a huge opportunity cost on social service delivery. It is unfortunate that the most vulnerable demographic groups, such as, the elderly, persons with disabilities, minority ethnic groups and women suffer more, as they are the key beneficiaries of the government parastatals economic model,” she said.
Musamvi said these groups are at the receiving end and are the most hurt by current taxation structures that protect the rich.
“The findings by the AG are a reflection of a failed system, a government that has given up on its people. It is appalling that out of the 161 audit findings raised in the AG’s report of 2019 only 44 (28%) were fully addressed, 28 (17%) were partly addressed and 89 (55%) were not addressed at all,” she said.
“There is no commitment whatsoever from those in office to enforce the full implementation of AGs recommendations.
“You then also wonder how the same people presiding over exposed institutions remain at the realms of these parastatals despite their failure to account for national resources at a time citizens are still struggling with Covid-19 induced losses,” Mutsamvi said.
She called for privatisation of these key institutions that have been the lifeline of the poor.
“It’s high time the AG is given powers to prosecute to deal with non-compliance or else this cycle of losses will never end,” Mutsamvi said.
Economic analyst Victor Bhoroma hailed Chiri’s work as deserving an accolade for doing a sterling job.
He, however, noted that revelations in her reports citing same challenges go as far back as 2015 with the same corporate governance issues and recommendations which are ignored by government.
“Most state entities are now parasites to tax payers, drain on the economy and are insolvent. Privatisation and corporate governance reforms are the answer,” Bhoroma said.
“The challenge is that very few genuine investors are willing to buy them and the government does not want to lose control of parastatals.
“The most important constraint to state entities reform is lack of political will to address economic policies impacting investment, prosecuting corruption cases and dealing with political interference in SEPs affairs. Without political will, nothing moves,” he said.
Effie Ncube, an independent researcher and political analyst, said the Auditor General’s report was a reflection of serious accountability failures in Zimbabwe.
“Every year, the reports point to the same issues of books that are in shambles and gross non-compliance with established public accounts and financial management principles,” she said.
“The reason why there is no improvement is because of the absence of consequence management. No one is being punished for non-compliance and outright corruption.”
Ncube also concurred with Bhoroma’s observation that Zimbabwe lacked the political will to fight corruption, leading to loss of billions of dollars to wasteful expenditure and corrupt practices, particularly within parastatals and state owned commercial enterprises.
“Billions are going down the drain. Failure to punish is for all intents and purposes equal to rewarding the individuals concerned. This more than sanctions is the driver of the country’s economic crisis,” he said.
Ncube further called for a change in government, arguing that it was difficult to note where the political will to fight graft and public financial management malpractices will come from.
“The current government has no willingness, whatsoever, to fight corruption. It’s all talk and no action. Instead of fighting corruption, the Zanu PF government has been the biggest source of graft,” he said.
President Emmerson Mnangagwa has said zero tolerance to corruption is one of his major objectives but this is not reflected by corresponding action.
Parliament should be doing its oversight duties with vigour so that it pushes the executive and judiciary to act against these governance issues affecting state departments and enterprises.