adminIt is understood the report was recently presented to Cabinet. The report was also sent to Parliament, GMB management and some Government ministries.
“The board’s wage bill of $10 185 548 (for the year 2009/2010) is more than twice the revenue generated from the commercial activities ($4 079 980), making it clearly impossible for the board to sustain itself on the revenue from commercial activities,” reads the report.
“The board’s payments system is centralised at Head Office in Harare with all payments being made from pool accounts as a measure to enhance prioritisation of payments. As a result we could not establish what the realised gross revenue of $4 079 980 from commercial activities was specifically used for. All proceeds were deposited into the pool accounts.”
The auditors said GMB could not sustain itself on the current trading levels in respect of commercial activities.
According to the audit, only $4 079 980 was realised from the commercial activities against expenditure of $27 921 294 including an amount for employment costs totalling $10 185 548.
The report revealed that GMB’s wage bill at the time of the audit was about $1,1 million per month.
GMB, according to the Comptroller and Auditor General, does not have a proper accounting system, thereby exposing it to fraud.
“The management and accounting systems in place are weak and inadequate. There is urgent need for implementation of proper accounting systems.
“The SAP accounting system already acquired by the board is not being fully utilised. As a result there is no proper and formal accounting system in place, making it difficult to establish the accurate costs of production and operating costs,” the auditors revealed.
However, GMB management claimed they had a world-class accounting and management system in place.
They said the system was not yet fully utilised because of scarce financial resources.
The Comptroller and Auditor General also questioned some of the business decisions made by the board.
The auditors said some of the commercial business activities were incurring losses.
“The board has not been and may not be able to generate enough revenues to sustain its operations without Government assistance. Based on our findings only $15 522 389 was generated from all activities against incurred costs of $27 921 294.
“We noted that GMB is leasing a farm from Guruve Rural District Council in Mashonaland Central Province since 2004. The farm is mainly used for banana and coffee production.
“Considering the farm’s performance and operating results, one can easily conclude that the Board has no capacity to manage the farm.
“In the year 2009/2010, the farm produced $22 311 as revenue at a cost of $39 853. A loss of $17 542 has been incurred in the year under review,” reads the report in part.
According to the audit, some of the commercial activities were not viable, among them maize and flour milling, bakery operations and coffee processing.
The Comptroller and Auditor General said some of the senior personnel at GMB were incompetent.
“Some of the board’s key decision making positions are occupied by officials of questionable competence. Top management is taking no remedial action to ensure that all board officials in the finance section are performing to expectations.
“For instance, the board is fully aware that the finance section has failed to deliver proper financial monitoring, reporting and overall accountability for resources entrusted with them.
“Incomplete, inaccurate financial reports are produced and presented. Generally, the department lacks supervision and control and there is no timely presentation of reports to both management and the board of directors,” the report reads.
This resulted in the board of directors, through the finance and audit committee, expressing concern on the poor presentations, lack of information and non-timeliness of the reports.
The Comptroller and Auditor General said GMB has a poor credit control system at head office.
The report claims all debtors were supposed to be controlled at head office in accordance with the GMB credit policy.
However, auditors quoted management saying this had been rectified and that all credit applications were being forwarded to the head office.
According to the audit, there were debtors originating from depots, which were not being reflected in the consolidated financial records.
The report also indicated that huge amounts of money had been lost through thefts.
“A total value of $346 573,90 was lost through thefts and other irregularities during the period under review with only a total value of $46 514 recovered. $300 059,90 is yet to be recovered as at 4 August, 2010.
“$18 507 is assessed to be likely to be recoverable. The balance of $223 172,90 is assessed to be very unlikely to be recovered as the perpetrators have been assessed to have no significant assets in their names.
“However, the culprits are appearing before the courts of law,” the auditors said.
Some of the potential losses include $308 377 worth of debts by private millers.
The debtors have since been handed over to the GMB’s attorney due to non-payment.
“The board is failing to have accurate reconciliations of payments by farmers for inputs sales made during the course of the year.
“Out of $7 627 866 worth of sales realised, only $1 770 000 has been deposited into the board’s Agribank inputs account and remitted to the Ministry of Agriculture.
“The board has no clear record of which farmers are yet to pay, giving room for default by the farmers without follow-up from the board,” the auditors said.
GMB management responded saying the programme for inputs was co-ordinated by CBZ as the lead bank and Agribank was participating in the scheme.
“The GMB is, however, working toward better interface and continuously improving relations with Agribank as well as strengthening internal control systems.
“Reconciliation of GMB inputs account was done using deposit slips at provincial level. The bank statements are resident at head office and are used for reconciliation,” GMB management was quoted as saying in the report.
Online Reporter