The country’s roads administrator, Zimbabwe National Road Administration (Zinara) assigned the Vehicle Inspection Department (VID) to collect transit and overload fees without a contract, a new report by auditor-general Mildred Chiri revealed on Friday.
The disclosure has raised financial mismanagement concerns
stemming from the “gentlemen’s agreement.”
Transit fees are paid by foreign registered vehicles using
Zimbabwe’s roads while overload fees are paid by vehicles that exceed their
stipulated weight.
Zinara’s 2020 annual report shows it collected about $1,26
billon in transit fees.
In her report analysing Zinara’s financial accounts for the
year ended December 31, 2021, Chiri said proper agreements must be signed on
the deal.
“The VID was collecting transit and overload fees on behalf
of Zinara at a commission of 20%,” Chiri said.
“However, there was no memorandum of understanding/contract
between VID and Zinara to govern the principal-agent relationship.”
She said there were “inconsistencies in the remittance of
revenue”.
It is a concern that permeates through most of reviewed
financial statements for the period.
Chiri said government agencies must stick to laid down procedures
and laws in handling public funds.
In a response, Zinara management said they were working on
addressing the issue.
“The draft contract has been done,” said Zinara.
“Engagements with the Ministry of Transport and the VID on
same is now in progress and is expected to be concluded by the end of second
quarter 2022.”
Zinara’s deals have come into renewed spotlight after
Parliament’s public accounts committee (PAC) revealed that the administration
was dealing with ‘shelf’ companies in deals involving huge amounts.
The firm’s new board and management have made undertakings
to address a series of governance shortcomings reported by a forensic audit
last year.
Marondera Central legislator Caston Matewu, who is a PAC
member, revealed last week that Zinara paid US$70 million to a consultancy
called Golden Roads, to help the administration find a suitable road
contractor.
Golden Roads was paid the money between 2012 and 2015 for
the deal.
The committee said it was a briefcase company.
State media reported on Wednesday that the deal had been
cancelled after Parliament raised the red flag
in one of the most dramatic changes by a state agency.
Chiri also raised concerns over Zinara’s special purpose
vehicle, called Infralink Private Limited.
The firm was established to collect toll fees at along the
Plumtree-Mutare Highway, which facelift was completed in 2014, under a contract
with Group 5, the South African firm.
“Infralink (Private) Limited received a garnishee order for
understated income tax and Value Added Tax (VAT) of US$46 977 476 in 2015,” she
said in her report.
“The amount was provided for, however management is not in
agreement with the determination by the tax authorities and contends that the
tax status of the company is still to be established.
“As a result, no tax assessments and provision for tax
liabilities were made for 2016, 2017, 2018 and the current financial year.
“Therefore, there is potential additional exposure of four
years.
“The effect of non-accrual of these tax obligations are
considered material to the financial statements.”
Chiri said Zinara had not aligned its procurement
procedures with the law.
“As a result, the Administration was not complying with the
requirements of the (law) in that contracts were being signed after delivery of
goods and services,” she said.
“This was contrary to the Public Procurement and Disposal
of Public Assets Act.” Standard
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