ZIMBABWE’S ROADS which could have all been fixed in less 7 days, are in a desperate state just as President Robert Mugabe’s family administration loots an estimated $11Million siphoned through the dodgy ZINARA parastatal government falsely claims is renovating the roads, attempting a job that can easily be completed by full salaried Transport Ministry staff members.
ZINARA which is headed and single handedly controlled by Mugabe’s cousin, Albert, failed to deduct $7,5 million being 10 percent withholding tax to 23 suppliers that had no tax clearance and proceeded to pay $4,1 million to creditors without authorised payment vouchers, an audit has revealed.
According to the audit, Mugabe’s senior management were paying themselves hefty monthly allowances, including $9 000 holiday allowance per individual outside the payroll, prejudicing the Zimbabwe Revenue Authority of revenue in tax. Zinara is among seven State entities that had adverse reports from Auditor-General Ms Mildred Chiri in her 2014 report that was made available yesterday.
Already Transport Minister Obert Mpofu has resigned from the blame as he told ZimEye.com earlier, “call ZINARA, don’t call me. ZINARA is under a board, why don’t you talk to the board chairman,” he said as he avoided naming Mr Mugabe’s name.
The parastatal collects more than $5,5 million per month from 26 tollgates, owes among its debtors the Development Bank of South Africa ($12,8 million), NMB ($8,5 million), the Department of Roads ($5 million) and Cimas for employees’ medical aid cover.
It also collects around $130 million annually from road access fees, vehicle licensing, transit fees, and fuel levy, among other revenue streams.
The State Media reports that the The Zimbabwe Mining Development Corporation paid $3,1 million on corporate social responsibility with no breakdowns, acknowledgement of receipts from beneficiaries and gave non executive directors 2 940 litres per individual with $27 450 holiday allowance each without the parent ministry’s approval.
The Environmental Management Agency board raised its own fees without approval from the parent ministry, while the Health Services Board approved increased fuel allocations for board members without the concurrence of Treasury among other ills noted.
On Zinara, Ms Chiri said the Administration dealt with suppliers that had no valid tax clearance and had paid $75 million to 23 suppliers prejudicing Zimra of $7,5 million in tax.
“I observed that Zinara did not deduct 10 percent withholding tax for payments made to suppliers without valid tax clearance certificates,” she said.
Some of the firms were Infralink ($63,7 million), Twalumba Civils (2,4 million) Group Five Engineering ($200 000), Heritage Agro Equipment ($2,4million) Badon Enterprises ($2,4 million) Fremus Enterprise ($2,2 millon) Applied Wighing Scale ($200 000) Bitumen, Brown Engineering, Forit, Cortman Investments, Gratic Trading, Easthset, Gramaton, Tegasteel among others.
In response, Zinara management told the auditors that tax clearances lapsed after the firms were already contracted leading to the exposure but said efforts to recover the money were on course.
“Infralink has been part of Zinara and was formed only for the purposes of acquiring DBSA loan and repayment thereof. Zimra had two of its commissioners conflicting on Infralink registration for VAT and income taxes. One commissioner registered it and another de-registered it. This brought confusion and the likely exposure,” read the brief response.
On the $4,1 million payment that occurred between 2012 and 2013, Ms Chiri said in terms of Zinara standing instructions for payment to be made, payment voucher and the bank transfer request should be authorised by the relevant signatories.
“I observed that payments amounting to $4 157 937 were made without authorisation since the payment vouchers were not signed by the relevant signatories. The risk is that fraud and errors may not be detected resulting in financial loss to the organisation,” she said.
It was noted that management paid themselves allowances outside the payroll thereby circumventing payment of tax.
The monthly allowances were home telephone ($225), entertainment ($750), home security (24hours) private fuel (750 litres) and holiday allowance ($9 000.)
“Vehicle loans amounting to $140 000 availed to each of the directors were above the authorised $100 000 in the contracts of employment,” she said.
Zinara former chief executive, Mr Frank Chitukutuku unilaterally increased his salary from July to December 2013, said Ms Chri.
The Administration bought a Jeep Grand Cherokee and office furniture for an official in the parent ministry worth $83 000 and $10 230 respectively.
“I also noted that on December 28 2012 the Administration paid for Christmas hampers worth $173 000 to staff at the parent ministry in violation of the Roads Act.
The Administration disbursed funds to local authorities beyond the budgeted allocations as high as 1 503 percent while others received nothing.
For example, the Department of Roads got $14,3 million against an allocation of $3,3 million, Rusape town council got $668 000 against an allocation of $93 000 in 2013 while in 2012 it got $992 000 against an allocation of $124 000.
Kariba urban council did not get anything for in the two years while it had an allocation of $150 000 (2012) and $94 000 (2013).