Govt urged to recover funds from suppliers, parastatals

BY TATIRA ZWINOIRA

TRANSPARENCY International Zimbabwe (TIZ) says government should recover funds from suppliers who have not delivered services and goods paid for by parastatals and State enterprises.

Only 103 out of the 179 State enterprises and parastatals submitted financial statements for audit last year, with the institutions continuously remaining unaccountable in their use of
public funds, according to the recent Auditor-General (AG)’s 2018 Report.

Of the ones whose financial statements were submitted for audit, the AG’s office found that there was a “lack of due diligence when procuring goods and services” which resulted in cases
of some payments being made without subsequent delivery.

The Zimbabwe Electricity Transmission and Distribution Company, a subsidiary of Zesa Holdings, entered into a two-year contract with a company called Pito Investments in April 2010 for
the supply of US$4 962 722 worth of transformers, which have still not been delivered.

The Zimbabwe Power Company (ZPC), another subsidiary of Zesa Holdings, paid in advance the same Pito Investments US$561 935 for transformers which have also not yet been delivered.

ZPC also paid York International ZAR 196 064 in 2014 for gas that hasn’t been received to date.

Similarly, the Grain Marketing Board also made an advance payment of US$1 014 163 for 2 476 tonnes of maize to an undisclosed supplier in 2016 and documentation of receipt of this grain
could not be established.

“There is need for forensic audit/investigation that goes beyond noting that a few suppliers are not delivering goods paid for. It is important for government to invest in a holistic
audit that shows the extent of this challenge in public procurement. Amounts of public revenue are directed towards public procurement and the non-delivery of goods procured is a huge
impediment to government’s reform agenda that is spelt out in the Transitional Stabilisation Programme (TSP),” TIZ said in a recent statement.

“The TSP notes the need to combat the leakage of public revenue through rooting out unethical practices in public procurement. The flagging out of these issues by the AG become highly
critical, especially at an opportune moment when the Procurement Regulatory Authority of Zimbabwe (PRAZ) has been set up and tasked to provide oversight over procuring entities. It is
in the interest of PRAZ to follow up on these issues and develop systems which identify and blacklist suppliers who default on delivering.”

“These unaccounted for goods and services by private companies threaten government’s service provision in sectors such as power generation and even food security for citizens,” TIZ
noted adding that the terrain of public procurement in Zimbabwe has been dominated by suppliers whose beneficial owners are politically-connected persons with a lot of political
influence.

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