Auditor-General audits expose missing Zaka RDC stands and dumpsite law breach

Auditor-General audits expose missing Zaka RDC stands and dumpsite law breach

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Audits by the Auditor-General into Zaka Rural District Council’s 2023 and 2024 accounts have uncovered significant gaps in financial reporting, including 219 residential stands that were not recorded in the council’s financial statements.

The Auditor-General, Vimbai Chikwenhere, issued qualified audit opinions for both years after identifying a mix of accounting breaches, unrecorded public assets, questionable recognition of some assets, weak debt management practices and environmental compliance failures.

In her report, Chikwenhere said the council did not treat the 219 stands and consumables as inventory, despite International Public Sector Accounting Standards (IPSAS) requiring such items to be recognised when they are held for sale or distribution in the ordinary course of business.

“The Council did not recognise two hundred and nineteen (219) stands and consumables as inventory in the financial statements,” Chikwenhere said. “This was contrary to IPSAS 12 – ‘Inventories’ paragraph 11 which requires items held for sale or distribution in the ordinary course of business to be recognised as inventory.”

Chikwenhere warned the omission materially misstated the council’s accounts, leaving the financial statements incomplete and masking the true value of public assets under the local authority’s control. The report recorded “misstatement of financial statements” as the key risk linked to the missing inventory.

Council management accepted the audit finding and said the inventory would be valued, with the pegged stands recognised in future financial statements.

The Auditor-General also raised a recurring concern that Zaka RDC has, for a second consecutive year, failed to recognise land and infrastructure assets such as road networks and water reticulation systems in its financial statements, contrary to IPSAS requirements.

“The Council did not recognise land and infrastructure assets such as road networks and water reticulation systems in the financial statements,” Chikwenhere said. “This was contrary to IPSAS 45 – ‘Property, Plant and Equipment’ paragraph 6 which requires items that meet the definition criteria of property, plant and equipment to be recognise.”

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In the 2024 audit, the council was further faulted for recognising three software programmes valued at ZWG0.32 million as intangible assets, despite auditors finding the council did not have the level of control required for the software to qualify as council-owned under IPSAS.

“These software programs did not meet the recognition criteria of IPSAS 31 – ‘Intangible Assets’ paragraph 21 which requires intangible assets to be recognised only when the Council had control over the software programs,” Chikwenhere said. Management indicated the software would be removed from the financial statements in 2025.

Revenue management and debt recovery were also flagged after auditors found the council did not recognise expected credit losses on receivables disclosed at ZWL8.6 billion. The Auditor-General said this overstated the value of debtors and could misrepresent the council’s prospects of collecting outstanding amounts.

“The Council did not recognise an allowance for credit losses on its receivables with a carrying amount of ZWL8.6 billion disclosed in the financial statements,” the report stated. Council management said it was finalising a debt management policy to guide future assessments and provisioning for doubtful debts.

On service delivery and environmental compliance, the Auditor-General found Zaka RDC did not have a landfill for waste disposal and was instead using a dumpsite.

“The Council did not have a land for disposal of waste. As a result, the Council was using a dumpsite,” Chikwenhere said, adding that the practice was cited as contrary to the Environmental Management Act and exposed the council to penalties while posing pollution and health risks to surrounding communities.

Management said the existing dumpsite would be decommissioned and that an Environmental Impact Assessment would be carried out before a new waste disposal site is established.

The report noted that the council implemented one previous recommendation by depreciating property, plant and equipment, but continued to fall short on inventory valuation, with stores inventory still neither valued nor recognised.

Contacted for comment, Zaka RDC chief executive officer David Majaura initially said: “I will revert to you…after I gather the facts. Now busy doing something…” Calls to him later went unanswered by the time of publication.

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