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Belated 2008 audit report tabled in parliament
Southern African Parliamentary Support Trust
September 30, 2011

The 2008 Annual Audited Report has now been tabled in the House of Assembly, more than two-and-a-half years after the end of the fiscal year. This clearly shows that the Comptroller and Auditor General’s Office (C&AG) is still unable to conduct an audit of national accounts and submit reports to Parliament on time. This problem of delayed audited reports continues to dog Zimbabwe’s public finance management system despite the promulgation of laws intended to put an end to the problem.

Section 35 (12) of the Public Finance Management Act says the Minister of Finance shall submit to the House of Assembly audited consolidated annual financial statements within 180 days (six months) of the end of the financial year. This means the audited report for 2010 should have been submitted to the House by 30th June 2011. Even before we talk about audited reports, the law requires every accounting officer of a ministry to submit to the respective parliamentary committee the unaudited financial statements of his or her ministry within 90 days of the end of the financial year. The Minister of Finance will then submit to the House of Assembly the unaudited consolidated annual financial statements within 90 days of the end of the fiscal year. However, not a single parliamentary committee has received these unaudited reports, nine months after the end of the 2010 fiscal year. This is a blatant violation of Zimbabwe’s laws.

Apart from the problem of delayed reports, the 2008 Audit Report itself makes very sad reading. A significant number of financial statements from ministries, government entities and statutory funds were not audited by the C&AG due to either late submission, or non-submission of these reports. Late submission and non-submission of reports for audit is due to reasons such as lack of skills and technical capacity in the ministries, inadequate supervision, poor work ethics and attempts to hide cases of occupational fraud and abuse, waste and incompetence. Whatever the reason, the end result is poor or complete lack of accountability and transparency to Parliament and the public by those who are tasked to account. This is a serious offence given that these funds are funded from taxpayers’ money.

What is most worrying is the number of years that these funds have been failing to account with no sanction imposed on the culprits. It is therefore important that the public finance management system and audit process do not allow such trends of late submission and/or non-submission of reports for audit to go unsanctioned. Heavy penalties must be legislated and applied on all who are supposed to account but fail to do so.

One other issue to point is that the C&AG could not give an opinion on the 2008 audited national accounts because of the deterioration in the public finance management system caused by the hyper-inflationary environment that reduced the Zimbabwe dollar to a worthless currency. But given the chaos that characterized the management of public resources in 2008, one can always infer that most of the accounts would still have been qualified by the Auditor General.

The question is what can the C&AG do when public funds have not been properly managed? The C&AG’s powers of surcharge are very limited and only confined to recovery of monies where there have been instances of mismanagement of public resources. The C&AG has no power to sanction those who fail to keep proper books of accounts, fail to produce financial statements or fail to meet reporting deadlines. This leaves the C&AG with virtually no powers to monitor and enforce compliance and sanction non-compliance. Limited powers by the C&AG therefore mainly explain the existing low levels of accountability in the public sector.

The C&AG reported that apart from the audit of records at head offices of ministries and departments, they could not carry out audits of outside stations because of resource constraints. The same situation prevailed during the 2007 audit. This has far reaching implications from an audit point of view given that generally outside stations are more risky because of the remote central control and their belief that they will not be audited. This creates an environment conducive to waste, occupational fraud and abuse and corruption.

The issue of resource constrains, which includes human resources, requires urgent attention. The C&AG’s office must endeavor to recruit and retain qualified and experienced staff. The Public Accounts Committee (PAC) and the Audit Office Commission should ensure this important issue is urgently addressed.

Now that the 2008 Audit Report has been tabled in Parliament, we expect the PAC to thoroughly scrutinize it and report to the House its findings and recommendations. What is critically important however is for the PAC to follow through on recommendations made. For the C&AG to repeat the same findings and recommendations in subsequent audits shows a continued breakdown of the public finance management system and failure by Parliament to discharge its oversight functions properly. And the PAC should insist on full compliance with the Public Finance Management Act and Audit Office Act in terms of when reports should be submitted to Parliament.

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