The Auditor-General (AG) has exposed serious financial management and governance failures across Midlands, with four local authorities receiving adverse or qualified audit opinions for widespread non-compliance with International Public Sector Accounting Standards (IPSAS).
Shurugwi Town Council, Zvishavane Town Council and Kwekwe City Council received adverse opinions, while Gokwe North and Gokwe South Rural District Councils (RDCs) were issued qualified opinions after auditors identified material weaknesses in financial reporting, asset management and revenue administration.
For Shurugwi, AG Vimbai Chikwenhere concluded the financial statements did not fairly present the council’s position after it failed to recognise land reserves, omitted investment property worth ZiG0.11 million and recognised stand sales revenue of ZWG87.5 million on a cash basis instead of the required accrual basis.
Auditors also questioned ZiG4.9 million in unsupported expenditure and found unsupported payables amounting to ZiG1.52 million.
The report also exposed governance weaknesses, including payment of fuel benefits worth US$3,726 to the council chairperson without ministerial approval and use of ZiG47.91 million from estate funds to finance recurrent expenditure instead of capital projects.
Only two of eight previous audit findings had been resolved.
Zvishavane Town Council also received an adverse opinion after auditors uncovered extensive accounting deficiencies, including failure to revalue property since 2017, failure to recognise land assets and failure to assess assets for impairment.
The audit identified unresolved payables variances of ZiG5.52 million, receivables with unresolved credit balances of ZiG17.22 million and unsupported journal entries creating a ZiG36.22 million variance between billable income recorded in financial statements and billing reports.
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Revenue from stand sales worth ZiG21.07 million and beer levy income of ZWG1.70 million was recognised on a cash basis.
The council also excluded its three schools from consolidated financial statements, while ZiG1.76 million in payroll variances and employee benefits worth ZiG11.12 million were processed outside the payroll system.
Operationally, 36.24% of treated water was lost through non-revenue water, exceeding the international benchmark of 25%, while ageing sewer infrastructure caused spillages in Highlands, Izayi Park and Kandodo.
Only two of 28 previous audit findings had been addressed.
Kwekwe City Council received an adverse opinion after failing to recognise infrastructure assets such as roads, bridges, sewer pipes, water pipelines and streetlights.
Auditors also found weaknesses in residential stand management, with sold and leased stands still recorded as available for sale, affecting inventory valued at ZiG225.1 billion.
The council failed to consolidate its five schools’ financial affairs, and only one of three previous audit findings had been resolved.
Gokwe North RDC received a qualified opinion for failing to revalue property and account for infrastructure assets, while incomplete revenue databases, unsigned mobile telecommunications leases and nine months of salary arrears threatened service delivery.
Management said it planned asset revaluation and a development levy database by end of 2025.
Gokwe South RDC was also qualified for failing to recognise residential stands held for sale as inventory and could not reconcile a ZiG2.27 million receivables variance.
The audit reports paint a picture of persistent financial rot across Midlands local authorities, with repeated IPSAS non-compliance, weak asset management and slow implementation of previous audit recommendations. Most councils acknowledged the findings and said corrective measures were underway.
