Auditors bill Air Zimbabwe $500 000

THE Air Zimbabwe (AirZim) forensic auditors, BCA, have billed the troubled airline nearly $500 000 since January 2011 for an audit on the financials of the company that has since resulted in the suspension of five senior executives early this year.

BY PAIDAMOYO MUZULU
SENIOR REPORTER

The audit company is owned by Budhama Chikamhi, who is the chief forensic auditor for the company.

Sources told NewsDay that BCA was appointed the forensic auditors in January 2011 without going to tender and had been working on the AirZim books for the past three years. The auditors had billed the airline a cumulative $370 562 as of July 2013.

NewsDay failed to establish how much was billed from August to December 2013 and the potential fees to cover the audit from March to December 2013. However, insiders said the fees for that period could be as high as $100 000.

Chikamhi was evasive when contacted for comment.

“We regret to advise that our terms of engagement bind us to confidentiality and we are thus unable to relate our client’s affairs to the media,” said Chikamhi in an email. “Should you require any clarification on any matters relating to the Air Zimbabwe Forensic Audit, please refer your questions to the chairman of the board.”

New AirZim board chairman, Valentine Sinemane was not immediately available for comment.

These new revelations come as BCA was last month asked by the Transport ministry to extend its audit to the period ending December 31 2013.

NewsDay understands that BCA has not yet begun that phase.

Documents in our possession show that up to February 21 2014, BCA had received a total of $284 000 from AirZim. The amounts were paid in batches of $5 000 or $10 000 a week and at times through provision of air tickets. The documents reveal that between May 3 2013 and January 3 2014, BCA received local and regional tickets valued at $3 932.

The tickets were valid for the Harare-Bulawayo and Harare-Johannesburg trips.


All the tickets were return.

The documents further reveal that AirZim still owes BCA $82 630.

BCA has failed to complete the forensic audit in less than six months like what most audits do, sources say, because they did not have adequate and competent staff to undertake the project.

“The lead BCA auditor is not a fully qualified auditor and therefore cannot carry out that kind of work,” the sources said.

The sources added that Chikamhi was getting special treatment because of his alleged links to some senior government officials. Sources said BCA had the advantage of having sight of forensic audits by Ernst and Young (2006) and KPMG (2007) yet it still struggled to complete its audits in reasonable time.

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25 Comments

  1. Parastals choosing substandard auditors soo that they don’t find anything. Big companies like NRZ should engage the big 4 auditors not ana musiyamwa vasina audit methodology. Same ne RBZ who are audited by ruzengwe. kuiota here ikoko

    1. @Freedom.
      Ruzengwe ari right uya. Atori Chartered accountant paari paya uye anoshandirwa nemachartered accountant. Ruzengwe haasi musiyamwa basi!

    2. iwe RBZ is not audited by Ruzengwe. Secondly Ruzengwe z a reputable auditor and his firm is reputable within the industry. Haikona kungonyora zvinhu zvausingazivi iwe.

  2. This is really a cause for concern .First how did this company get appointed without going to tender and how can a forensic audit take more than two years given that KPMG and Ernest & Young did some of the work. If the forensic auditors remain on the ground for this long it means they are not competent and end up as part of the problem as all objectivity is lost. Authorities need to wake up to this as findings will be ridiculed and challenged. Very long other auditors will have to be appointed to audit anomalies with this BCA

  3. BCA, crooks of NOTE!!

    Now that there is so much corruption in the country, its open season for crook auditors to go around fleecing boards using simple scare tactics, like – “Dont you want us to check on your management to ensure that it is not stealing from you?” In this environment, of cause they are stealing.

    Then they bill much more than they quoted, and then smear someone, any one (good if they are guilty for sure) to try and justify the huge bill. The auditor is the crook.

  4. This is daylight robbery by these fake auditors. Reputable audit firms do not charge such exorbitant audit fees. Who will audit the auditors?

  5. Forensic Audit dzipiko dzinoitwa nanamupurwa vakadaro.Forensic Audit inorohwa paStates mdhara kwete matakanana amuri kuita muZimbabwe.Every Tom & Dick has an Chartered Accounting Firm.Tinoziva the Big 4 isu.

  6. Auditors are to be rotated from time to time to obtain value for money and reduce the familiarity threat which can also include self interest threats – The Standards on Auditing are very clear and those charged with governance require to familiarize themselves with them. Rotate auditors – your organization will benefit immensely.

  7. PTY is absolutely right. Given length of time they have been on the ground its like they are the now the internal auditors of Air Zimbabwe which is against all forms of good corporate governance,Is it true that this guy has been receiving cash payments from parastatals he audits to circumvent Zimra if so there is need to appoint a professional firm for a professional audit to be carried out

  8. Another looting spree disguised as an audit, God have mercy on our country

  9. The man in question is PwC alumni so is Big 4 trained so is well competent. And trust me Audit firms charge more than what his firm is requesting! Get your facts right before posting random comments!

  10. kana mabhozida achinzi atambire $6 thuz where on earth can that money be dug?

  11. This guy Budhama wekwaChikhami while he is big 4 trained he has become a rogue. Wherever he goes has a history of writing sensational reports which at times is just a matter of uplifting issues under dispute and pasting them to his reports .Look at RTG the report was eventually thrown away. Even the Airzim insurance issue he was simply given figures and stats by Champions insurance brokers and claimed credit for doing nothing but appending his signature, Look at how he was being used by Bvute to fight Munodawafa a man of intregrity and promote Bvute’s profile.Anyway these two Bvute and Chikamhi are related on the mother side—-fishy????

  12. Imi siyai indigenous company imboitawo cash .Vangani varikumora pasina all these complains

  13. Hapana apo. All Zim auditors are corrupt esp Big 4 yacho and am talking from experience. Their international parents should come and close them down. Hapana zvavari kuita, Ruzengwe is far more honourable than them. Even govt should investigate them. PwC yacho ne Ernst & Young why didnt they uncover fraud. When they were appointed curators of banks, they messed up big time. And were later sued left right and centre.

  14. rotation is by ISA standards after a 7 year aiding tenure and this again is not mandatory if the chief audit partner can be rotated both nesessarily the firm. to be appointed auditor status in zimbabwe one has to be either an ACCA or ICAZ member in good and regular standing and the man in question fits this criteria. the engagement fee only poses a problem if it is 10-15% of the audits firm entire revenue this will pose as a threat. the period of audit is agreed upon n the engagement letter nd the fact tht kpmg audited thr firm b4 is irrelevant as only relience nd nt total dependance can be placed on their work at e auditors discretion

  15. But iyewo Chikamhi ngaaite mari zvakangwara kwete zvaari kuita.How can one reaudit what he was paid for .In 2011 with auditors like Farirai Kasipo and Chirozvi all accounts were audited and balanced except insurance.He was paid large sums of money and no report was ever produced.Now he is redoing the work with freshman from university and his sister Patience just to make cash zvakaoma

  16. For the sake of a good clean up, that $500 000 is worth it compared to what would have gone straight into a few people’s pockets. I hope a good lesson has been learnt by our government that it pays in the end to do the best in the beginning.

  17. $500 000 for a forensic audit that covers 3 years is small money, AirZim is a big company with complex structures and systems, the fee could have been easily $1 000 000. The period of the audit may be longer than usual due to the nature and scope of the engagement, it should not be compared directly to the KPMG and Ernst & Young work without looking at the scope of the engagement.

    Claiming that staff is not well experienced and competent should be corroborated by substantial evidence. Because the lead auditor is not a C.A we cannot conclude on incompetence as the partner who will review and sign off the report is well experienced and competent. On planning the audit the experience and competency of the audit team would have been taken into account in line with ISAs and the period of the audit would have been discussed with the board when the Audit Planning Memorandum was tabled.

    This article is malicious and grossly unfair to the auditors.

  18. 500 000 over three years is small. This auditor must be making budget overruns. Air Zimbabwe statutory audit should be 250 000 for one year what more a forensic audit. This article is uninformed

  19. Poor Jounalist

    Journalism in Zim is dead. We have people who like to throw salt into the air and cause mayhem konzi ma journalists are working. Rubbish!

    This writer is saying $500 000 “maiwee yakawanda” and as he/she expected – we are now rubbing our eyes to the sting of his salt. He needs to contextualise – $500k alone yes looks big especially given the macro-environment but it could be small causing audit budget overruns as one here has suggested. What does it take to forensic audit an airline – what are the international figures for such exercises. What are the qualifications of the auditors required to competently undertake such a task. All these are a small part of journalistic contextualization required. Kwete kuita take advantage of the explosive nature of the current readership following the ‘salarygate’ matter.

    Please do better guys!

  20. After reading all the comments, can I ask if any1 knows the last century AirZim posted a profit? Isnt the period under review the one which also coincides with the famous pilot strikes?? attachment of aeroplanes (if my memory still serves ryt) etc.

  21. How can the auditor, who did not go to tender, who has been auditing Air Zim for the last 3 years and didn’t unearth any wrongdoing when clearly there was plenty, be appointed to audit Air Zim when when these irregularities have been discovered? ,

    1. Akomana!! Anhu aya ndinoaziwa!! They are not the most competent there have been! One of them was an 18 year old school leaver whiling up time ari ku audit kwehama yake. Its sad all this has to happen to some of our beloved companies that are already struggling. My heart bleeds. I don’t think there was any C.A amongst them.

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