Parastatal rot: why the AG needs more bite to tackle endemic corruption

Parastatal rot: why the AG needs more bite to tackle endemic corruption

HARARE, June 30 (The Source) – If anyone needed evidence of why the Auditor-General needs a bigger whip and more teeth, they need to read the section on the Zimbabwe National Road Authority (Zinara) in her 2016 audit.

While roads around the country crumble, the ride is smooth for executives at Zinara, the agency responsible for Zimbabwe’s roads. They overstate their profits and illegally award themselves big perks, and they feel no guilt.

In her audits, A-G Mildred Chiri presents her findings and asks management to respond. Zinara’s responses to her damning findings shows public officials are under no pressure to perform, or reform.

Zinara could not prove how it spent project expenditure amounting to at least $2.1 million. In addition, Zinara overstated its profits by close to $50 million, the A-G says.

How did Zinara respond? Do they panic? Not at all.

“Observations noted. We are going to regularise in 2017,” Zinara management bluntly responds in its management notes.

And what about the $2 million dollars that Zinara has in Allied Bank, the failed bank that was owned by Obert Mpofu, who was once the minister in charge of Zinara? Why is Zinara not attending creditors meetings, the A-G asks?

“Noted,” says Zinara.

And what of all the big money that Zinara management was illegally enjoying? The $137,417 in board fees and cellphone allowances, and close to $30,000 in fuel allowances of up to 250 litres per month? Entertainment allowances of $2,250? And those holiday allowances of $6,300, which totalled $18,500 per year? None of these allowances are in the contracts of the managers that enjoyed them, the A-G observes.

“Observation noted. Allowances will be paid as per contract,” Zinara says plainly.

And why are all these illegal perks being paid outside the pay roll, the A-G asks?

Zinara replies: “Observation noted. We will ensure all allowances and benefits pass through the payroll.”

What shows the impunity is that Zinara had previously been fined by Zimra for not paying tax on allowances, and yet continued not to pay. The reason is that, like most heads of state enterprises and government departments, they know that nothing will happen to them, beyond being named in a audit report.

They know that the worst that can happen to them is a few days of bad press. It’s a small price to pay for holiday allowances and thousands of dollars’ worth of illegal perks.

This is why the A-G needs to be given more teeth.

Section 309 (2) of the Constitution allows the A-G to “order the taking of measures to rectify any defects in the management and safeguarding of public funds and public property.”

According to the Audit Office Act, which governs her office, the most she can do is to “lay before the Attorney-General a case in writing as to any question regarding which the Comptroller and Auditor-General requires a legal opinion, and the Attorney-General shall furnish the Comptroller and Auditor-General with such legal opinion”.

It is scant reward for all the work that Chiri and her team have been putting in over the years. At most, the report is a rap on the wrist for the serial pilferers of public funds that, repeatedly, tell her that her concerns are “noted”.

It is time that the A-G’s office was given the powers to refer issues for prosecution, at the very least.

A similar debate arose in South Africa recently over the powers of their own A-G, after a report revealed widespread mismanagement across the country’s local authorities. Earlier, the country’s chief justice Mogoeng Mogoeng had spoken in favour of stronger powers for the office, to end the culture of impunity.

“When people know that no consequences would flow from what they do, or minimal consequences would flow from what they do, they are in all likelihood going to do it again and again and again,” Mogoeng said.

And sure enough, across Chiri’s report, there is evidence of public officials repeating the same offences that the A-G would have warned about, year after year.

Out of the 151 audit recommendations raised during the 2015 financial year, less than half were implemented in 2016. A mere 12 percent of the recommendations are classified as “in progress”.

The law allows the A-G to order corrections, but it gives her no real tools to punish those that fail to comply. Beyond strongly worded statements, there are no enforcement structures to give her role more bite.

With no consequence for poor performance or taking money out of the public cookie jar, it is no surprise that large parts of the recommendations sections of the A-G’s report look like a copy and paste job.

A further sign of the lethargy that surrounds public accountability came from Finance Minister Patrick Chinamasa this week, who admitted in Parliament that he was yet to read the A-G’s report. One would expect he would be first to grab it, so he can know how the scarce resources he struggles to raise are being managed.

Chinamasa said it is only after pressure from MPs that his Ministry is now “putting in place people who can study and interrogate those reports so that corrective action can be taken”. All along, “we did not have the apparatus within the Ministry to go through these Auditor-General’s reports,” Chinamasa said.

While the A-G is “independent and subject only to the law” according to the Constitution, it still depends on Treasury for funding.

With funding falling, the A-G is going to find it harder to maintain her high standards.

“In 2016 I visited 316 stations as compared to 468 in 2015, which is a decrease of 32.5%. This was mainly due to the inadequacy of financial and manpower resources,” the latest A-G report says.

A study by University of Zimbabwe’s Tawanda Zinyama, titled “Efficiency and Effectiveness in Public Sector Auditing,” found that adverse audit findings were not taken seriously by Treasury.

“Thus, audit report does not have an impact, as they do not lead to any remedial action. As a result, the Audit Office is rendered a watchdog institution without teeth to bite,” Zinyama says.

Chiri has a staff of 218 auditors and 40 support personnel, which made over 300 appointments to produce the latest report. It is a large document with three volumes, which are a thousand pages in total. It must have cost the A-G and her team many sleepless nights to produce.

This is a team that is putting in a hard shift, but for little return. The press will report on all the theft and mismanagement and we will all gasp and shake our heads, but the culprits will move on, and continue in their looting ways.

It is time the laws were strengthened to give the A-G more bite to clear out the filth.