Sedco loses $800 000 to internal fraud

THE Small Enterprises Development Corporation (Sedco) reportedly lost around $800 000 between 2010 and 2012 due to fraudulent activities and ineffective accounting processes involving its staff, Parliament heard yesterday.

VENERANDA LANGA

Secretary in the Ministry of Small and Medium Enterprises (SMEs) Evelyn Ndlovu and Sedco general manager Gladys Kanyongo confirmed the development when they both appeared before the Parliamentary Portfolio Committee on Public Accounts chaired by Mufakose MP Paurina Mpariwa (MDC-T).

One of the committee members Zengeza East MP Alexio Musundire (MDC-T) said:  “The Ministry of SMEs disbursed $4 000 000 to Sedco during the period 2009 to 2011, and it has continued to disburse money to Sedco even though the parastatal was failing to pay back the loans.  What are you doing to ensure those loans are recovered?”

Ndlovu said Sedco had failed to repay the loans to the parent ministry because it was not adequately funded by government, its major shareholder.

“They are failing to run the institution and to pay back the loans to us because of under-capitalisation,” Ndlovu said.
Kanyongo added that the problem was that Sedco had given unsecured loans of between $200 to $2 000 to people who did not have collateral, and when they failed to pay there was no recourse.

Chikomba East MP Edgar Mbwembwe (Zanu PF) said the Auditor and Comptroller-General’s audit report also revealed weaknesses where a driver at the ministry had made claims worth $1 615 which had inconsistent dates, giving rise to suspicion that there could be fraudulent activities.

Kanyongo said the major problem at Sedco was that from 2009 to 2011 they did manual capturing of information, resulting in manipulation of data by officers, under-receipting and subsequent loss of about $800 000.

“Harare was prejudiced of$318 561, Bulawayo $179 834, and Gweru
$300 000.  We undertook disciplinary measures and some of these employees were dismissed.  The cases were reported to the police.

In Gweru only $85 000 was brought before the courts and we are still waiting for the remaining $200 000 to be brought before the courts.  In Bulawayo, they were granted bail and now they have absconded.  In Harare people were arrested and one later skipped the country.  Lawyers for the other two sought for postponement of prosecution saying the one who skipped the country was the one responsible,” she said.

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