HomeLocal NewsDamning audit report exposes financial rot

Damning audit report exposes financial rot

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KWEKWE External auditors hired by the Local Government ministry to probe Kwekwe City Council have produced a damning report citing serious financial irregularities ranging from underbanking and possible fraud.

The audit was carried out by Urban Development Corporation (UDCORP) for the period 2009 until the departure of former city treasurer Albert Zingwe last year.

The report submitted to council on March 4 exposes a number of financial irregularities ranging from underbanking of cash receipts and a failure to observe financial regulations, creating a ground for fraud.

Part of the report reads: Audit observed that council was frequently underbanking cash and as such was deliberately not banking all its cash collections intact as per requirement of the Urban Councils Act and recommended practice.

Council audited figures reflected $30 000 was underbanked as at December 31 2009, while $47 608 was overstated as creditors owing to the local authority when it had already been spent and was supposed to reflect on the expenditure column.

The underbanking exposes council to risk of failing to detect theft and fraud as underbanking can be used to mask any anomalies that could be detected in a normal functional system. The cash resources balances disclosed in the financial statements presented for audit are inaccurate, reads the statement.

Zingwe, who was suspended and later expelled over the allegations, is still fighting to be reinstated arguing charges levelled against him were based on his personal differences with town clerk Emmanuel Musara.

In his defence, Zingwe said 2009 was a tough year for council and, therefore, extraordinary measures had to be employed to sustain the local authority which faced serious liquidity challenges.

However, the audit report paints a bad picture of the financial systems at the local authority where payments were made without signatures being appended to required documents.

UDCORP attributed leaks to weak financial controls by Zingwe and called on the local authority to tighten up controls.

Audit observed internal controls were lapse and weak, the systems in use charactersed by high frequency of underbanking, several misappropriation issues . . . A total of $10 328 was misappropriated by revenue clerks due to lack of supervision and monitoring of subordinates, reads the report.

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