The Lupane Local Board has been condemned for serious shortcomings in asset management, financial reporting and governance, with the Auditor-General (AG) issuing a qualified opinion on its 2024 accounts despite finding them “fairly presented” in most respects.
AG Vimbai Chikwenhere said the qualification stemmed from the board’s failure to comply with several International Public Sector Accounting Standards (IPSAS), particularly regarding property and asset management.
The board failed to recognise land in its financial statements, contrary to public accounting standards and did not assess the residual values and useful lives of its property, plant and equipment at the reporting date.
“Had the Local Board recognised and carried out an assessment of residual value and useful life of its property, plant and equipment, the financial statements would have been materially different,” the report stated.
Properties held for rental income were incorrectly classified as property, plant and equipment instead of investment property, contravening IPSAS 16.
The board also failed to assess its assets for impairment despite indications that some assets may have lost value.
Beyond financial reporting issues, the audit exposed governance weaknesses including the absence of critical operational policies.
The board was operating without an information technology policy or a disaster recovery policy, contrary to the Public Finance Management Act.
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The AG warned that this could result in inconsistencies in handling operational matters and recommended the board establish effective policies to strengthen financial management and internal controls.
Management responded that land valuation had commenced in July 2025 and that it was awaiting a report from the Ministry of Local Government’s Department of Valuation and Estates Management, citing financial constraints.
They acknowledged the absence of key policies and said they would be prioritised in 2026, while committing to annual impairment assessments.
However, the AG noted that the board had made limited progress on previous audit recommendations.
Of seven findings raised in the previous audit, only two had been addressed, while five remained unresolved.
Outstanding issues include failure to separate investment property from property, plant and equipment, failure to revalue assets, failure to recognise land and buildings separately, and failure to provide supporting documentation for deferred income.
The report urges the board to strengthen compliance with IPSAS and improve governance systems to enhance the accuracy and reliability of its financial reporting.
