Due to the failure to back up their accounting data, the use of manual accounting systems, and the presence of incompetent treasurers in some cases, a total of 16 local councils in Zimbabwe failed to submit their audited financial statements for 2018 to 2019.
Some of the reasons are as follows: Lack of sound accounting packages such as PASTEL and SAGE in some local authorities, skills flight caused by poor uncompetitive remuneration, delays in appointing auditors by the Auditor General (AG) resulted in some councils having to wait for a period of time before being assigned an auditing firm, and Covid-19 restrictions hampered progress.
According to the Public Accounts Committee (PAC) on Non-Compliance with Financial Statements, the 16 councils include Gweru City Council, Gwanda Municipality, Bubi Rural District Council and Bulilima Rural District Council among others.
PAC found out that Gweru City Council had problems with the accounting software so the urban council hired an IT expert to resolve the problem.
In Gwanda, the municipality explained the journal ledger was not properly set up as it should have been, resulting in the failure to quickly reconcile and finalise financial statements.
“The loans and creditors modules were not functional. They contacted the system vendor, Excess Solutions, and they were not able to solve them timeously and that kept on adding to the delays,” read the report.
In the report, Beitbridge Town Council officials said, “the majority of the delay was caused by the council’s upgrade of the Enterprise Resource Planning (ERP) system, the Pastel Evolution, from Version 8 to Version 11, which caused teething problems, and the software vendor took a long time to resolve the issues.”
Officials from Hwange Local Board informed PAC they had an incompetent treasurer plus funding challenges.
“They explained approximately ZWL five million was needed as audit fees to audit the council in arrears by five years. However, the council is engaging the AG and is working on a road map for addressing the issue,” read the report.
As for the Rural District Councils (RDCs), Bubi explained their treasurer resigned and had to recruit another one who was approved in February 2021, resulting in queries taking long to be resolved.
“Bubi bought a new accounting software package in 2016 which was used for producing 2017 final accounts. Staff had challenges with the new software and a qualified system administrator was hired in 2018. This contributed to the delays in finalising financial accounts for 2018,” read the report
Insiza RDC reported that its accounting system experienced technical problems, as the Pastel Version 14 crashed and the data was recovered later in January 2021.
In Matobo, the RDC said auditing firm Gattstar Chartered Accountants was supposed to audit the 2017 and 2018 financial accounts.
Gattsar audited the 2017 accounts and failed to submit the final accounts.
“Matobo then contacted the AG and advised that Gattstar’s services were cancelled. This delayed the submission of financial accounts. A new Audit firm was appointed, Creston Zimbabwe Chartered Accountants in 2020,” read the report.
Hwange RDC reported it had to appoint a substantive treasurer following a lengthy court row with the former treasurer while the migration from a manual system to a computerised system led to delays in the production of financial statements.
Gutu RDC said it switched from Pastel Partner to Sage Evolution for its accounting system, pushing back the release of the 2019 financial statements and making it impossible to produce the 2020 financial statements.
In Chimanimani, the RDC indicated its financial statements were ready for submission but had no auditing firm to submit the accounts to.
Chimanimani said it was up to date on account submissions up to 2017 when KLM Chartered Accountants was in charge, but when the AG appointed Gattstar Accountants to audit the financial statements for 2018, they were yet to arrive.
After extensive correspondence with the AG’s Office, the contract for Gattstar was cancelled and the AG was only appointed to audit the 2018 accounts in December 2020.
It emerged Gattstar Chartered Accountants were unable to travel to Chimanimani due to road damage caused by Cyclone Idai.
In Makonde, the RDC reported their CEO had left the council and their Internal Auditor was fired while the council still uses a manual system, which makes preparing financial accounts time consuming.
Chipinge RDC said UDICORP had been the firm’s auditors since 2017 and requested they be replaced as they had stayed for nine years, following the Ministry of Local Government’s systems audit.
PNA Chartered Accountants was appointed to audit Chipinge but the appointment letter delayed. When PNA was scheduled to arrive, Cyclone Idai and Covid-19 struck.
Guruve RDC said its Assistant Accountant died in 2017 while the Treasurer was fired for fraud in 2018 and they were replaced in 2018 and 2019 respectively.
In 2019, Guruve embarked on a process to migrate from manual system to a computerised system, and this, coupled with shortage of personnel, resulted in a huge backlog.
Buhera RDC was informed that in 2018 it would be audited by Gattstar but when it was supposed to audit 2019 financial accounts, lockdown restrictions were imposed and auditors were not categorised as essential service.
“After the lockdown, Gattstar was supposed to start auditing in September 2020 but the contract was terminated by the AG. MNK, the new auditors for the council were appointed in December 2020,” read the report.
“The auditors were working from home due to Covid-19 restrictions. Some of the delays were also caused by lack of smooth transfer from Gattstar to MNK which took three months. When the new auditors requested some information from Gattstar, it was not forthcoming, as a result, there were some delays in carrying out their work.”
Masvingo Rural District Council officials informed the Committee that Covid- 19 resulted in skeleton staff coming to work, leading to delays in accounts preparation.
