The Auditor-General has raised serious concerns over financial management at Zaka Rural District Council (RDC), revealing that 219 residential stands were not recorded in the local authority’s financial statements, alongside several other accounting and governance weaknesses.
The findings, contained in the Auditor-General’s reports for the 2023 and 2024 financial years, resulted in qualified audit opinions after auditors identified multiple breaches of International Public Sector Accounting Standards (IPSAS).
According to Auditor-General Vimbai Chikwenhere, the council failed to recognise 219 residential stands and consumables as inventory, despite accounting standards requiring assets held for sale or distribution to be reflected in financial statements.
“The Council did not recognise two hundred and nineteen (219) stands and consumables as inventory in the financial statements. 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 said.
The Auditor-General said the omission resulted in a material misstatement of the council’s financial statements and failed to reflect the true value of public assets under its control.
Council management acknowledged the issue and indicated that the residential stands would be valued and included in future financial statements.
The audit also found that Zaka RDC had not recorded key public infrastructure, including land, road networks and water reticulation systems, in its books.
“The Council did not recognise land and infrastructure assets such as road networks and water reticulation systems in the financial statements. This was contrary to IPSAS 45 – ‘Property, Plant and Equipment’ paragraph 6,” the report stated.
In addition, auditors found that three software programmes valued at ZWG0.32 million had been incorrectly recognised as intangible assets, despite the council not having sufficient control over them as required under IPSAS.
The Auditor-General further noted that the council failed to provide for expected credit losses on receivables amounting to ZWL8.6 billion, resulting in an overstatement of debtors.
“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 said.
Beyond financial reporting, the audit raised concerns over environmental compliance after finding that the council was operating a dumpsite instead of a properly approved landfill, contrary to the Environmental Management Act.
“The Council did not have a landfill for disposal of waste. As a result, the Council was using a dumpsite,” Chikwenhere said.
The report warned that the practice could expose surrounding communities to environmental pollution and possible health risks.
Council management said it plans to decommission the current dumpsite and carry out an Environmental Impact Assessment before establishing a new landfill facility.
While the council implemented an earlier recommendation to depreciate property, plant and equipment, the Auditor-General noted that longstanding issues relating to inventory valuation remain unresolved.
Zaka RDC Chief Executive Officer David Majaura said he would respond after gathering the facts. However, further attempts to obtain comment before publication were unsuccessful.
