Audit Exposé Puts Gweru Council Bosses on the Spot Over Missing Millions and Collapsing Services

… Unveils Shocking Financial Mismanagement and Incompetence

By Delicious Mathuthu

Gweru - A recently released damning audit report by the Auditor-General has laid bare years of financial mismanagement, gross inefficiency and brazen disregard for governance principles at Gweru City Council, triggering outrage among residents who have long decried collapsing service delivery.

The report, covering the 2021 to 2023 financial years, exposes a local authority that has continuously ignored accounting standards, siphoned funds through unexplained overpayments, undocumented expenditure and failure to address core service delivery issues, all while hiding behind excuses of "funding constraints” and “system inefficiencies.”

For three consecutive years, Gweru City Council has earned adverse audit opinions, the worst verdict in public finance accountability.

"I have audited the financial statements of Gweru City Council for the years ended December 31,
2021-2023 and I issued an adverse opinion for all the three years," Acting Auditor General, Rhea Kujinga said.

"The financial statements do not present fairly the financial position of Gweru City Council… due to non-compliance with International Public Sector Accounting Standards (IPSASs)," she said.

The sweeping indictment hinges on several unresolved irregularities, including failure to adjust for hyperinflation (IPSAS 10), refusal to consolidate Go Beer Investments into the council's financial statements (IPSAS 35), and non-accounting for joint ventures such as the Gweru City Parking Management Company (IPSAS 36).

"The Council did not account for its share in Gweru City Parking Management Company (Private)
Limited, a joint venture, in its financial statements.

"This was contrary to International Public
Sector Accounting Standard 36 - “Investment in Associates and Joint Ventures” paragraph 22
which requires the Council to account for its share in of the Investment in Joint Venture using
the equity method," the Acting Auditor General said.

The report also revealed that Go Beer’s financials, as reported by Kwedu News previously, have not been audited since 2010, yet still failed to clean up its books.

One outstanding case of malpractice is the overpayment saga involving a backhoe loader.

The Council contracted a supplier for a backhoe loader at US$82 330 but inexplicably paid US$102 048, a US$19 000 overpayment.

The Auditor-General flagged the anomaly, warning of “financial loss to Council arising from the non-recovery of the overpaid amount” and potential fraudulent activities.

When pressed, the Council's management gave a convoluted explanation.

“The backhoe loader was purchased using forex that was bought from the auction using the full value of the invoice from the supplier and was remitted directly to the Supplier.

"However, a deposit had already been paid to the Supplier. An investigation will be conducted and recovery measures will be implemented where applicable,” the local authority said.

In 2023 alone, the Council failed to provide supporting documents for expenditure amounting to ZWL$883 million (approximately US$176 600 at the time).

In 2021 ZWL$155 million (about US$1,8 million at the time) was unaccounted for.

Invoices, requisitions and goods received vouchers were simply not available, the report says.

“Council’s record-keeping was not adequate. Irregular transactions may be processed and not detected on time,” Kujinga said.

Management blamed this on “poor record-keeping practices, use of proforma invoices for payments, and weak controls.”

The promised corrective actions however sound eerily similar to pledges made in previous reports, none of which have yielded improvements or been implemented.

The audit also revealed that as of 2023, the Council could not reconcile its bank balances, with an unresolved variance of ZWL$4.9 billion (US$980 000), compared to ZWL$422.9 million (US$704 833) in 2022 and ZWL$93.4 million (US$1,1 million) in 2021.

The Auditor-General warned that such discrepancies create fertile ground for irregular transactions and corruption, calling for immediate corrective action.

“Bank reconciliations should be prepared on a monthly basis," she said.

While the Council drowns in financial mismanagement, the city’s residents are left to grapple with increased rates, crumbling infrastructure and unsafe living conditions.

Despite millions said is being poured into water projects, Gweru is still grappling with its water situation.

The report revealed that only 78% of water meters have been replaced, leaving large swathes of residents on estimated billing and paying for services not rendered, with management riding on umbrella billing as an excuse.

Infrastructure assets in the city such as sewer reticulation systems and road networks are not accounted for, or properly maintained.

Residents from high density suburbs like Mkoba and Senga continue to face daily sewer blockages with no proactive response from the local authority.

The Auditor-General noted that Gweru City Council's revenue collection systems are outdated and manual, resulting in incomplete databases for refuse collection billing and prone to corruption.

Residents have consistently lamented uncollected garbage piling up, for weeks, sometimes months.

A resident from Mkoba, Tanaka Gondo, confirmed that residents are paying for un-rendered services.

“We are being billed for services we do not get. Sewer bursts go unattended for weeks, water comes once or twice a week, and garbage is collected sometimes once a month.”

The Council’s management responses to audit findings are a masterclass in bureaucratic evasion.

From unsupported expenditure, overpayments, to non-compliance with accounting standards, the go-to excuse is either “cash flow constraints” or a vague promise of “future compliance.”

On the failure to maintain comprehensive asset registers, Council claimed that assets over 30 years old were carried at nil value due to lack of valuation funds.

On non-consolidation of subsidiaries, they cited “lack of integration” and historical operational challenges.

The Acting Auditor General, Kujinga, noted that the local authority was unwilling to implement recommendations made by her office.

"The Council did not make progress in addressing findings that were raised in my 2023 annual
report.

I raised eleven (11) findings, one (1) finding was addressed and ten (10) findings were
not addressed as indicated below," she said.