NetOne forensic audit opens can of worms

Takunda Maodza Assistant News Editor
AXED NetOne boss Mr Reward Kangai and four executives at the State-run enterprise encashed over $274 000 in holiday allowances in contravention of their contracts of employment.

Save for Mr Kangai, the contract of employment for the rest of the executives barred encashment of holiday allowances in the event the intended beneficiaries had not visited any resort centres.

Documents in The Herald’s possession, which are mainly from a forensic audit instituted at NetOne by Price WaterhouseCoopers recently, show that Mr Kangai was paid $135 702 cash after encashment of his holiday allowances between 2012 and 2015.

Other beneficiaries of the scandalous holiday encashment scheme were Spiwe Ndoro, Godfrey Tarupuwa, Darlington Gutu and Matavire Dzimhanhete.

Ndoro got $55 264,15, Tarupuwa ($41 726,01), Dzimhanhete ($23 589,93), and Gutu ($18 136,08).

“We noted instances where directors encashed their holiday allowances contrary to a clause in their contracts of employment at that time which stipulated that: ‘In the event that the director fails to travel to any holiday resort, this benefit shall not be capable of being redeemed in whatever form,'” reads the forensic report.

It added: “The total cash-in-lieu of holiday allowance received by the directors over the years under investigation was $138 716.

Mr Kangai’s contract did not include a clause preventing payment of these allowances in cash.

“He received $135 702 in cash for these allowances during the period under review.”

The forensic audit report noted that NetOne’s encashment of holiday allowances policy did not set a ceiling for the holiday allowances to be enjoyed.

“The policy does not set a ceiling for the holiday allowances to be enjoyed at any level.

“It is best and common practice that such allowances as the holiday allowance will have a ceiling for the benefit.”

Mr Kangai personally approved the encashment of the obscene holiday allowances.

“We reviewed waiver requests made by the directors, which were approved by Mr Kangai, allowing for the encashment of the holiday allowances. No amounts were paid in cash before this waiver and there is no evidence that Mr Kangai referred the matter to the board.

“The forensic auditors were clear that Mr Kangai and his management violated best governance practice,” reads the report.

“The policy is silent about the encashment of the holiday allowance.

“According to best practice, this is a benefit which should only be enjoyed upon utilisation.

“Therefore, the encashment of the holiday allowance by NetOne directors contravenes these best and common practices,” further reads the report.

The auditors noted that Mr Kangai later amended the directors’ contract of employment in 2014 to enable them to claim holiday allowances even when they had not travelled anywhere.

“We noted that the directors’ contract clause prohibiting the encashment of the holiday allowances was revised in 2014 to stipulate that: In the event that the director fails to travel to any holiday resort due to unforeseen circumstances, for example, pressure of work, this benefit shall be capable of being redeemed in cash at the agreed cost approved by the managing director.

“The contracts were revised and approved by Mr Kangai.

” According to best practice, a change in benefits of this nature requires board approval. From our review of board meeting minutes for the period under review, there was no evidence that such approval had been granted,” state the auditors.

The auditors also unearthed payment of incentives to some staff members “for excellent work done” in 2010.

“Employment contracts have a performance-based bonus payment clause, payment of which is subject to board approval.

“The request for incentive payment was made by the late Mr Matavire and was approved by Mr Kangai.

“The total gross amount paid in incentives was $211 102,20, with a net total of $135 000,00.

“From our review of the board minutes for the period under review, there was no evidence that the board approved the payment of the incentives,” added the auditors’ report.