Council fails to account for $1m

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Kwekwe City Council could have been swindled of more than
$1 million between 2011 and 2012 through unethical financial dealings by top management, NewsDay has learnt.

BY BLESSED MHLANGA

External audit reports prepared by Udcorp for the year 2011 and 2012, which were only released last month to the council’s audit committee, exposed the scam.

According to the reports, council lost a total of $765 051 in two years with $297 595 being unaccounted for in 2011, while $467 456 was lost in 2012.

“Audit noted a $30 000 difference between the rates account and the sanitation account inter-funds. This difference could not be effectively reconciled and remained outstanding at the time audit was concluded,” the Udcorp report said.

“Capital receipts unapplied figure of $267 595 could not be substantiated by corresponding bank balance.”

The auditors said they failed to do a complete job because important internal financial documents were missing, while some were bereft of accuracy.

“We were unable to confirm the accuracy and completeness of cash and cash equivalents disclosed in the financial statements since there was a significant number of unreconciled items in the form of under banks and over banks. The total unreconciled cash amounts to
$467 456,” the auditors said.

One of the senior officials was booted out of an audit committee meeting last Thursday after he attempted to present the same reports.
Audit committee chairman councillor Weston Masiya said: “We are currently seized with the reports and going through them to understand what they mean. At this stage, all discussions are in committee and, therefore, I cannot share details with the Press.”

In 2012, the Local Government ministry carried out its own audit of council affairs and concluded that there was rampant corruption and fraud at the local authority.

The ministry’s audit reports accused two top council officials (names supplied) of fraud including tender stripping, making unauthorised payments and cases of underbanking and overbanking.

Ministry auditors also questioned why a senior official (named) was acting as city treasurer, saying the move was against good corporate governance.

Although the report was widely published in the NewsDay, it was never discussed in council with town clerk Emmanuel Musara repeatedly telling councilors that he never officially received the report.

The audit committee was now pushing to have the ministry report adopted as official so that it could be discussed in council.