Whenever the audit report of public and government-owned enterprises comes out there’s always some shocking revelations revealed to the public. In a way, the findings from the audit report show how the government is running the country. Among the many companies that were audited, we have plucked out governance issues raised against just a few companies (that are relevant to us).
Every Deposit- Taking Microfinance Institution (DTMFI) is required to ensure that the Board of Directors has a balance in terms of relevant skills and experience, as per the RBZ Minimum Licensing requirements. A review of the Directors’ profiles revealed that there was no board member with Information and Communication Technology (ICT) skills and expertise considering the fact that financial institutions operate on digital platforms.
The Company was facing going concern problems as its operations continued to be hampered by shortage of working capital. The following were indicators of going concern problems at the Company:
Negative working capital of US$9 714 036 (2017: US$6 404 179); failure to fully pay for the POTRAZ licence fees and as at year end the Company owed POTRAZ US$3 280 000.
The Company was failing to connect new customers with a long outstanding backlog. As at December 31, 2018 the Company had installation fees liability amounting to US$865 342 emanating from customers yet to be connected.
The company had outstanding statutory and other obligations to the relevant authorities and bodies amounting to $55 814 613 as at December 31, 2018. Enquiry with management revealed that the company has been failing to settle its obligations due to late settlement of invoices by debtors particularly government entities and parastatals which owed the entity $93 917 069 as at December 31, 2018.
The Corporation did not have a Board of directors during the year under review.
Learn more about what’s Transmedia here?
Zimbabwe Broadcasting Corporation (ZBC)
During a cash count at Radio Zimbabwe, I observed that the Administration officer was using a personal eco-cash account to receive Corporation funds from ZBC head Office to pay for goods and services. The cash in the eco-cash account of $562 did not tally with the balance on the petty cash book of $522 resulting in a variance of $40. Upon enquiry, I noted that the difference of $40 was as a result of personal funds held in the wallet.
1) The company did not have a donations policy. As a result, I was not able to determine the basis on which amounts totalling $334 154 were donated.
2) The Company paid monthly fuel and cellphone allowances to its non-executive directors during the year under review. These constituted remuneration which should be subjected to PAYE. However, I noted that these were being subjected to withholding tax.