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Post Reporter
FLOUTING of basic financial practices as well as failure to account for some of the money collected as school fees have been unearthed at Hartzell Central Primary School.
Both internal and external auditors who recently audited the Mutasa-based primary school’s books noted inconsistencies in adherence to set procurement policies and procedures.
The Manica Post is in possession of both audit reports.
The school’s responsible authority, United Methodist Church’s internal auditor, a Mr Mutowo, led the internal audit; while Harare-based Gesimat Consultancy and Auditors conducted the external audit.
The school’s receipting was reported to be in shambles.
ln 2020, Ecocash amounts totalling $95 189 were receipted for various purposes, but could not be located in the institution’s Ecocash statements.
Swipe and bank transfer amounts totalling $103 741 for various purposes were also receipted in 2020, but could not be located in the bank statements.
According to a report released by Gesimat Consultancy and Auditors and presented to United Methodist Church’s Administrative Assistant to the Bishop, Reverend Alan Masimba Gurupira, it is stated that financial transactions were not properly referenced.
Part of the report reads: “All swipe and Ecocash receipts in 2021 lacked an audit trail as they were not cross-referenced. It was not practicable to quantify the financial effects on the financial statements. We interviewed a Mrs Manhindi and noted that receipting in the books for fees paid through RTGS or internet banking is done using the date the bank statement was received, instead of the date indicated on the bank statement. The receipting of Ecocash is mostly done using the client’s phone message.
“There was no reconciliation being done using the Ecocash and bank statements. The swipe merchant copy done at the school was not being kept or filed. There is too much movement of staff in the accounting department.”
The auditors also interviewed the school headmistress, Mrs Eugenia Mudede who reportedly revealed that the school has no purchasing policy, but generally follows the procurement procedure of the Ministry of Primary and Secondary Education.
“We observed that the majority of the purchases were made with no comparative schedules or quotations being done. The majority of the expenditure was not attached with invoices, goods received notes and some source documents were missing.
“Therefore, there was no evidence to suggest that all the goods paid for were indeed received,” reads the report.
It was discovered that in 2020, the school paid $1 722 783 for goods without invoices or goods received notes, $325 466 for goods without source documents or vouchers and $123 863 for vouchers without salary schedules, bringing the total amount to $2 172 112.
In 2021, the school paid $1 912 582 for goods without invoices or goods received notes, $314 643 for goods without source documents or vouchers and $1 834 471 for vouchers without salary schedules, bringing the total amount to $4 061 698.
The school was also found wanting for failing to comply with International Accounting Standards – IAS29, the International Financial Reporting Standards (IFRS), IAS21 (the effects of changes in foreign exchange rates and AS16 ( property plant and equipment).
“When management prepared the financial statements ending December 31, 2020 and December 31, 2021, they did not comply with the requirements of IAS 29. The financial statements were not prepared in current units of functional currency.
“The preparation of financial statements without restating the functional currency in inflation adjusted amounts at the end of the reporting period constitutes departure from IAS 29. Had the financial statements been prepared in accordance with the requirements of IAS 29, multiple elements would have been materially adjusted.
“The IAS 21, requires foreign currency transactions to be included in the financial statements of an entity and that they should be translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
“In addition, the foreign exchange gains or losses resulting from the settlement of such transactions and from the translation at year-end exchange rates should be recognised in the financial statements
“The school transacted in United States dollars in 2020 and 2021. However, these transactions were not included in the presented financial statements and neither a separate financial statement was prepared in USD.
“The financial statements were presented only for transactions carried out in the Zimbabwean dollar. This means the foreign currency transactions were not translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
“Foreign exchange gains or losses resulting from the settlement of such transactions and from the translation at year-end exchange rates were not recognised in the statement of comprehensive income and expenditure. The failure by the school management to include USD transactions in the financial statements for the year ended 2020 and 2021 is significantly material and pervasive to the financial statements,” reads the report.
When contacted for comment, Rev Gurupira referred all questions to the school authorities.
However, Mrs Mudede was not readily available for a comment by the time of going to print.
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