NARRATIVE REPORT ON APPROPRIATION ACCOUNTS AND MISCELLANEOUS FUNDS,2014

423 Pages·2015·2.82 MB·English

ZIMBABWE

REPORT

of the

Auditor-General
for the

FINANCIAL YEAR ENDED DECEMBER 31, 2014
__________________________________________
NARRATIVE REPORT
ON
APPROPRIATION ACCOUNTS
AND
MISCELLANEOUS FUNDS
_________________________________________

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ZIMBABWE
Office of the Auditor-General
of Zimbabwe
48, George Silundika Avenue
Cnr. Fourth Street,
Harare, Zimbabwe

The Hon. Mr. P. Chinamasa
Minister of Finance and Economic Development
New Government Complex
Samora Machel Avenue
Harare

Dear Sir

I hereby submit my Report on the audit of Appropriation and Fund Accounts of Zimbabwe in terms of
Section 309 (2) of the Constitution of Zimbabwe read together with Section 10(1) of the Audit Office Act
[Chapter 22:18], for the year ended December 31, 2014.

Yours faithfully

M. CHIRI,
AUDITOR-GENERAL.

HARARE
June 15, 2015.

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ZIMBABWE

OAG VISION

To be the Centre of Excellence in the provision of Auditing Services.

OAG MISSI ON

To examine, audit and report to Parliament on the management of public resources of Zimbabwe

through committed and motivated staff with the aim of improving accountability and good
corporate governance.

OAG VALUES

CcOorMpoMrIaTteM gEoNvTernance.
Self-driven, promise

keeping t o foster
mastery in customer

service delivery
thereby leaving a
RESPECT
legacy of being
Accepting mutual visionaries.
INTEGRITY
and reciprocal
individuals' self- Being transparent,
esteem, diversity of trustworthy and fair
view and need for in order to guarantee
recognition and professionalism and
acknowledgement of goal congruence in
the office structures, ACCOUNTABILITY our daily conduct.

processes and
Responsibility of giving
authority.
assurance on the
effective use of public
resources and
answerable for
individual actions.

TEAMWORK

EMPATHY Results-oriented
contribution each one
Empathetic support
of us makes through
and encouragement
inspiration,
within the OAG
creativity, chemistry
family.
and effectiveness.
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ZIMBABWE
REPORT

of the

Auditor-General
for the

FINANCIAL YEAR ENDED DECEMBER 31, 2014
__________________________________________
NARRATIVE REPORT
ON
APPROPRIATION ACCOUNTS
AND
MISCELLANEOUS FUNDS
_________________________________________

iv
LIST OF ACRONYMS
1. AUSC - African Union Sports Council

2. BBR - Beitbridge-Bulawayo Railway

3. CBZ - Commercial Bank of Zimbabwe

4. COPAC - Constitution Parliamentary Select Committee

5. CPMZ - Campania Do Pipeline Mozambique-Zimbabwe

6. CSC - Civil Service Commission

7. DDF - District Development Fund

8. DIPA - Departmental Integrated Performance Agreement

9. GAAP - Generally Accepted Accounting Principles

10. GRN - Goods Received Note

11. IAS - International Accounting Standard

12. IDBZ- Infrastructure Development Bank of Zimbabwe

13. IDC - Industrial Development Corporation

14. IMPI - Information and Media Panel of Inquiry

15. MIPA - Ministerial Integrated Performance Agreement

16. NOCZIM - National Oil Company of Zimbabwe

17. OAG - Office of the Auditor-General

18. PFMS - Public Finance Management System

19. PMG - Paymaster General Account

20. PSIP - Public Sector Investment Programmes

21. RBM - Results Based Management

22. RBZ - Reserve Bank of Zimbabwe
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23. RTGS - Real Time Gross Settlement

24. SADC - Southern African Development Community

25. SAP - Systems Application Programme

26. SEDCO - Small and Medium Enterprises Development Corporation

27. SPB - State Procurement Board

28. SSB - Salary Service Bureau

29. T&S - Travelling and Subsistence

30. UNDP - United Nations Development Programme

31. UNWTO- United Nations World Tourism Organisation

32. VAT - Value Added Tax

33. ZEC - Zimbabwe Electoral Commission

34. ZERA - Zimbabwe Energy Regulatory Authority

35. ZIMASSET - Zimbabwe Agenda for Sustainable Socio-Economic Transformation

36. ZIMRA - Zimbabwe Revenue Authority

37. ZINARA - Zimbabwe National Roads Administration

38. ZINWA - Zimbabwe Water Authority

39. ZRP - Zimbabwe Republic Police

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TABLE OF CONTENTS

Page
General Report …….……………….…………….……………...…….....……….……………. (i)
Executive Summary …..……………….…………….……………...….….....……….……… (iv)
Section: 1. Finance Accounts……………….. ..…....…....…….…………………...….......... 1
2. Revenue Statements.………………………………………………………………..6
3. Appropriation and Fund Accounts………………………………………………...10
4. Annexures …………………………....…....…….…………………...…....…… 391

vii
GENERAL REPORT AND EXECUTIVE SUMMARY
SUMMARY OF CONTENTS
Page
Submission of Annual Report ……………………….……………...…….....……….………… (i)
Duties of the Auditor-General .……………………..…….…………...…....………….……….. (i)
Basis of Preparation of Public Accounts ....………….……..……..…………...……………….. (i)
Conduct of the Audit and General State of the Public Accounts ...………......……….……….. (ii)
Training and Staff Development .……………….…….……………....…....………….………. (ii)
Certification of Public Accounts …….....……………..………...…………...………………... (iii)
Audit Opinion ……………..………...…...……………..………...…………...……………... (iii)
Acknowledgements ………..………..……….…...…...………………………………...…… (iii)

Executive Summary…………………………………………………...……………………. (iv)

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GENERAL REPORT

1. SUBMISSION OF ANNUAL REPORT

In terms of Section 309(2) of the Constitution of Zimbabwe and Section 10 of the Audit Office
Act [Chapter 22:18], I am required, after examining the public accounts of Zimbabwe submitted
to me in terms of Section 35 (6) and (7) of the Public Finance Management Act [Chapter 22:19]
and signing a certificate recording the results of such examination, to prepare and submit to the
Minister of Finance, not later than June 30 of each year, a report of my examination and audit of
the public accounts of Zimbabwe.
In terms of Section 35 (12) of the Public Finance Management Act [Chapter 22:19] the Minister
of Finance is responsible for submission to the House of Assembly audited consolidated financial
statements.
The Constitution of Zimbabwe requires that all fees, taxes and other revenues of the State of
Zimbabwe from whatever source arising (not being monies that are payable by or under an act
of Parliament into some other fund established for a specific purpose or may, by or under an act
of Parliament be retained by the authority) shall be paid into and form one Consolidated Revenue
Fund. The administration and control over the Fund is exercised by the Treasury under the
provisions of Section 17 of the Public Finance Management Act [Chapter 22:19].
2. DUTIES OF THE AUDITOR-GENERAL
My duties as set out in the Constitution of Zimbabwe and amplified in the Audit Office Act
[Chapter 22:18] are:-
 to examine, audit and report on accounts of all persons entrusted with public moneys or
State property,
 to satisfy myself that the receipt and disbursement of public moneys has been made in
accordance with proper authority and has been correctly accounted for and that all
reasonable precautions have been taken to safeguard State property,
 to carry out Value for Money audits, which entail the examination into the economy,
efficiency and effectiveness with which those entrusted with financial and material
resources have utilized them in carrying out their mandates.
3. BASIS OF PREPARATION OF PUBLIC ACCOUNTS
Management of public funds is governed primarily by the provisions of the Public Finance
Management Act [Chapter 22:19]. Central Government uses cash accounting
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basis for Appropriation Accounts and partly accruals accounting for Fund Accounts. The
reporting framework for State Enterprises and Parastatals is International Financial Reporting
Standards (IFRS) and Local Authorities are moving to International Public Sector Accounting
Standards (IPSAS). The IPSAS are based on the IFRS and are issued by the IPSAS Board for
use by public sector entities.
4. CONDUCT OF THE AUDIT AND GENERAL STATE OF THE PUBLIC ACCOUNTS

My statutory audit is discharged by a programme of test checks and examinations which are
applied in conformity with the generally accepted auditing standards. The checks are intended
to provide an overall assurance of the general accuracy of the accounting transactions and not to
disclose each and every error.
I conducted audits at Head Offices of Ministries as well as visits to outstations. Results of the
audit of Provincial and District stations are included in my findings in this report. In 2014 I
visited 268 stations as compared to 47 in 2013, that is an increase of 470%. Details of the stations
visited are on Annexure A.
There was no improvement in the administration of Appropriation Accounts by Ministries as 26
(96%) out of the 27 audited, had material audit findings warranting management’s attention as
compared to 94% in 2013. Out of the 75 audited Fund Accounts, 63(84%) had material audit
findings warranting management’s attention (3adverse, 10disclaimer, 25qualified and 25
unqualified with material issues) which is almost the same as 83% in 2013. Annexure D has
more details. The Appropriation Account for the Office of President and Cabinet is not included
as the audit had not been completed at the time of finalizing this report. Also the Accounting
Officer for the Ministry of Finance had not signed the following accounts which are included in
this report: Appropriation Account; National Development Fund; Receipts and Disbursement;
Statement of Public Financial Assets and the Senior Officers Housing Fund.
My Office continued to contract to private auditors the audit of some State Enterprises,
Parastatals and Local Authorities in terms of Section 9 of the Audit Office Act [Chapter 22:18]
because of low staff levels in the Office. Annexure B shows the staff position during 2014. I
will take over the audit of contracted audits as and when the staff situation improves.
5. TRAINING AND STAFF DEVELOPMENT

Staff training and development remained as one of the key objectives of my Office. With the
assistance of the African Organisation of Supreme Audit Institutions for English speaking
countries (AFROSAI-E) to which Zimbabwe is a member, Donor community,
Civil Service Commission and other stakeholders, a number of training programmes were
attended by my staff in order to keep them updated with the developments taking place in the
audit profession. The training programmes conducted are on Annexure C.
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