Saturday, 7 March 2020

600 PROPERTIES VANISH FROM BYO COUNCIL BOOKS


MORE than 600 non-residential properties belonging to the Bulawayo City Council are not captured in the local authority’s inventory, raising fears that some bigwigs were taking advantage of the loophole to use the facilities for their businesses without paying rentals.

The  revelations are contained in a council confidential document where it was revealed that an internal audit had uncovered a number of irregularities within the Estates department, chief among them being the number of properties that did not appear on the council register. The state of the council inventory has for the past two years been subject to intense debate with residents questioning whether the local authority has the capacity to capture their vast property base.

“Some properties identified by internal audit in a previous audit exercise of estates have not been incorporated in the leased assets register. A comparison of the current asset register and an asset register from that exercise was done and we found 682 non-residential properties that were not captured in the current register. 

“Gaps in property type, property description, property references, stand numbers, property sizes, lease details and lease agreement dates were noted. Inadequate documentation of leased properties may result in the city losing some of its properties to lessees,” reads part of the report.

Responding to the observations by the audit team, the council’s estates department acknowledged that the findings were accurate, adding that they were working on filling the gaps that existed in the asset register but need 15 to 18 months to rectify the anomaly.

“None of the personnel in estates has worked in another real estate organisation, and half of them have educational backgrounds that are not related to real estate management. While they have considerable experience gathered in the course of their work in estates, they lack the flexibility and knowledge of real estate techniques. Estates is also not effectively enforcing lease conditions, especially those relating to the payment of rent. Of the 12 820 billing properties, 1 506 or 12 percent were up to date in rental payments and the rest owed,” reads the report.

The internal audit also unravelled that some accounts of the leased properties were not being billed meaning the local authority was being prejudiced of money that could go a long way in improving service delivery in the city. Furthermore, some lessees were taking advantage of the lax council procedures where after a lease expired, they continue occupying the properties with some going for close to 12 years staying at the properties for free.
  
“The situation facing the city’s estates section is common among other municipal real estate sections in Zimbabwean municipalities. In our research of peer sections at three municipalities in Zimbabwe, namely Harare, Gweru and Mutare, we found none that were engaged in effective estate management. Instead most were concerned with compliance-driven processes, and were not actively managing their real estate. We found no municipal real estate section with operations that served as an overall model of best practice,” reads the report.

As an example to the city’s flawed inventory, the estate revealed that there was a business that was operating at the council-owned Aisleby Farm without a lease agreement, with the business reportedly disputing the council’s ownership of the said property.

“Council should carry out an extensive exercise to ensure that all leased assets are recorded on the leased assets register and that the register is complete in respect of all required details. In addition, the estates section should carry out a thorough cleaning in the register for duplicated data. Further the section and the city legal section should seriously make concerted efforts to ensure that the city regains its legal title to properties and that they are billed and rent collected accordingly,” reads part of the report.

Two years ago it was reported that the local authority, which owns numerous properties in the city was not aware of the net worth of their properties, this exposing the local authority to possible fraud and undervaluing if the properties are to be sold.  The situation has reportedly led the council’s auditing firm — Ernst and Young Chartered Accountants — to raise a red flag on the matter. When the council last carried out an audit on their properties it emerged that tenants, some of whom were given 10-year leases in the 1970s, were still occupying the properties and were no longer paying rentals to the local authority. Sunday News

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