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
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