No Theft, Just Accounting Chaos?

… as audits say messy, Gweru City finance says merry

By Delicious Mathuthu

Gweru - For years, spanning almost a decade, Gweru City Council has been synonymous with adverse audit opinions, missing records and porous financial systems, from multi-million-dollar land sales with no buyer records to procurement payments made without proper invoices.

The city’s books have consistently drawn the Auditor-General’s ire, each report reading like a cautionary tale in municipal mismanagement, and yet, little has changed.

It is against this backdrop that Gweru City Acting Finance Director, Owen Masimba, stood at the 2025 midyear budget review and 2026 pre-budget consultations on Friday, August 8, offering a calm and confident defence with regards to the latest audit reports, 2021, 2022 and 2023.

“External auditors are there to give you independent assurance," Masimba said, "… there were no incidences of theft, fraud or misappropriation, your resources are in safe hands,” he told the gathering.

His words were meant to calm fears and close the debate; but in a city where public trust has eroded after years of alleged financial opacity and weak controls, they only provoked more questions.

Figures and findings in Acting Auditor-General (AG) Rhea Kujinga's reports however reveal that the Acting Director's statements are only a selective truth, one that glosses over a persistent culture of weak controls, missing paperwork and unresolved questions that have dogged the city for years, dating back to the days of Mildred Chiri as Auditor General.

Charming and strategic in his presentation, Acting Director Masimba acknowledged the “adverse opinion” stamped on the audits, but stripped it of its sting.

He hid behind a "management letter" sent to the local authority management which is not in the public domain.

“In terms of accounting,” he explained, “there are various ways; in the management letter, they detail the reasons for giving an adverse opinion,” he said.

Reasons, which are also detailed in the publicly availed audit reports.

Acting AG Rhea Kujinga, in her report, clearly explained the different opinions she gave, and what they mean.

"Types of audit opinions: Unqualified/clean audit opinion - The financial statements contain no material
misstatements.

“Qualified audit opinion - The financial statements contain material misstatements in
specific amounts, or there is insufficient evidence to conclude that specific amounts
included in the financial statements are not materially misstated.

“Adverse audit opinion - The financial statements contain material misstatements that
are not confined to, or misstatements represent a substantial portion of the financial
statements.

“Disclaimer of opinion - The auditor has not been able to obtain sufficient evidence to provide a basis of an audit opinion. The lack of sufficient evidence is not confined to specific amounts, or represents a substantial portion of the financial statements," she said.

The Association of Chartered Certified Accountants (ACCA) Global says a misstatement in financial statements, as in the case of Gweru, occurs when the reported numbers do not comply or make sense, meaning they are incorrect or misleading.

"… a misstatement occurs when an item isn’t treated correctly, meaning that the applicable financial reporting framework… has not been properly applied, including errors in classification, presentation, disclosure, or valuation which could arise from error or fraud," ACCA Global reveals.

Misstatement of financial statements, according to the International Standards on Auditing (ISAs) is a "difference between the amount, classification,
presentation or disclosure of a reported financial statement item and the amount,
classification, presentation, or disclosure that is required for the item to be in accordance with
the applicable financial reporting framework," Acting AG Kujinga concurred.

Gweru City Council says the cause was not mismanagement but technical hurdles, Zimbabwe’s notoriously unstable multi-currency economy, shifting currencies from ZWL$ to ZiG, as well as different rates for Ecocash, RTGS and US dollar transactions.

“For you to come up with one single rate… they want you to say how did you get it,” Masimba said, even pointing out that the government itself had moved to “blended inflation” to cope with the problem.

On missing supporting documents, Acting Director Masimba insisted it was an issue of timing, not fraud.

“We can process a payment based on a pro-forma invoice, the tax invoices needed, probably because of some oversight, were not attached.

"If it was stolen we would be having ZACC (Zimbabwe Anti-Corruption Commission) all over this place and people locked up,” Masimba said.

The AG’s office, however, has been telling a very different story, not just in the latest released 2023 report, but over the better part of the last decade.

Away from the current currency and pro-forma excuses, in 2019 for example, Gweru was found to have sold residential and commercial stands worth US$1.7 million without maintaining any records of who bought them, how much they paid, or whether balances were outstanding.

Back to the 2023 financial report, Gweru City Council failed to consolidate previous Go Beer Investments, and current Gweru City Parking investments in its financial statements, breaching IPSAS 35, Kujinga said.

It also omitted accounting for its share in Gweru City Parking Management Company, a joint venture, contrary to IPSAS 36 requirements to use the equity method.

Year after year, audits have flagged the same weaknesses, no proper asset registers, failure to reconcile accounts, missing lease agreements, unrecorded fuel usage and millions in unpaid debts, some left to grow stale.

Parliament’s Public Accounts Committee even launched an inquiry into Gweru City’s repeated failure to implement the Auditor-General recommendations after the 2020 report, but the trail went cold. No public resolutions were ever released.

Nationally, Gweru is not alone as councils battle the same cocktail of inflation accounting headaches, missing documentation and policy gaps.

The Zimbabwe Coalition of Debt and Development (ZIMCODD) in their breakdown of the 2023 Local Authorities audit report, they noted only two (2) clean audit opinions out of 92 local authorities, with about 60% receiving adverse opinions.

Public Accounts and Auditors Board (PAAB) standards, which Acting Director Masimba mentioned in his bid to sanitise the city's adverse report, say this does not make the situation acceptable.

Financial governance standards, whether set by the PAAB or international benchmarks like IPSAS, as mentioned in the audits, require councils to keep complete, verifiable records.

A pro-forma invoice, also flaunted by the finance department as defense during the budget meeting, without a follow-up tax invoice is, in audit terms, simply “unsupported expenditure.”

Unsupported expenditure” is not a harmless label, research from the Association of Chartered Certified Accountants (ACCA) Global reveals, it means the transactions might be either legitimate or hiding waste, misuse of funds or even corruption, hence the need for proper tax invoices to prove spending is above board.

Acting Director Masimba’s defense hangs on one idea, that "if there’s no proof of theft, there’s no wrongdoing", but in the world of municipal finance, the absence of proof often points not to innocence, but to the absence of systems capable of proving anything at all.

The Auditor-General's office has consistently highlighted the very loopholes, poor documentation, lack of reconciliations, policy gaps that make both theft and mismanagement harder to detect.

While the debate over “adverse opinions” may seem technical, the consequences are concrete.

Some attendees at the budget meeting said the Acting Director's silence was much better as his adverse report explanation only caused more confusion.

Gweru residents, through associations such as Gweru Residents and Rate payers Association (GRRA), Gweru Residents Forum (GRF) and Gweru United Progressive Residents And Ratepayers Development Association (GUPRARDA) are on record complaining over general poor service delivery, misplaced priorities at the local authority which prefers management luxuries, a city with limited water supply, tarred roads turned to dust and some cratered with potholes, erratic garbage collection and housing development stalled for years.

Some residents say even if the city may not be bleeding cash to outright thieves, it is losing value, efficiency and trust.

The local authority also appears reluctant to implement Kujinga’s recommendations aimed at preventing leaks and such adverse audit findings over the years.

"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…," the Acting AG said.

Kujinga said some of the unaddressed findings at Gweru City include cash and cash equivalents where the council did not perform bank reconciliations.

Beer Levy, where the council did not obtain beer levy statistics from brewers as recommended in previous reports, some levies being collected in cash which compromises accounting standards.

Property, plant and equipment where infrastructure assets were not accounted for.

Inflation adjusted financial statements were also not hyper-inflated as recommended. On expenditure, expenses had no supporting supplier invoices and
receipts.

Investment in Go Beer was also not consolidated.

Council had unsupported journals with no documents to support the processed
journal entries in its books.

The council also did not perform payable, or receivable reconciliations, and debtors with credit balances were not investigated.

Only addressed was the property, plant and equipment, and IPSAS 12 inventories where the local authority managed to account for its stands as recommended.

A tangible positive development in the audit reports is the expedited finalisation of accounting records, which has enabled the local authority to bring its audit reporting up to date, with the results for the previous financial year expected by October 2025, a glimmer of hope that management at Gweru City Council could be willing to arrest the accounting chaos at Town House.