admin
Zvamaida Murwira Harare Bureau
THE National Railways of Zimbabwe could have been prejudiced of $2 million after suppliers paid to provide goods failed to do so, an audit has shown. The NRZ flouted procurement procedures after it made payments to suppliers before they had delivered the goods. In her 2012 report, Auditor General Mildred Chiri said the parastatal was exposing itself to risks as there could be financial loss resulting from failure to recover prepaid amounts from defaulting suppliers.
“The organisation awarded tenders to a number of suppliers through the State Procurement Board. Upon awarding the tenders, prepayments amounting to $1.9 million were made to five suppliers who ended up not meeting their service/supply obligations to the organisation,” reads the report.
Some of the items include 2,000 welding sets, ballast screening plant, six trucks, 1,034 plastic sided shows and 450 safety boots, among others.
“Prepayment should only be made when a supplier produces a bank guarantee to ensure that funds are secured. Management should make follow-ups on defaulting suppliers. Legal action should be taken to recover the outstanding amounts,” said Chiri in her report.
In its response, management said due to the economic environment in the country, some reputable companies who had been supplying NRZ for a long time faced difficulties and failed to deliver.
“The system of purchasing, including vetting of suppliers, has been strengthened and the necessary guidelines developed in conducting due diligence tests. Bank guarantees are now being sought before prepayments are sought. However, it should be borne in mind that NRZ can only recommend to the SPB and has no power to stop, let alone overturn its decisions,” said management.
In a related matter, the Health Professionals Authority received more than $27,000 that it failed to receipt, an audit has shown.
“There were significant amounts that were deposited directly into the bank account of the authority and not subsequently receipted. Among them were some direct deposits which could not be traced to the customer as they were classified as unknown.”
According to a sample tabulated by the audit, the Ministry of Health and Child Care deposited $18,000 which according to audit was not receipted.
“The risk or implication is that some revenue may not be accounted for where receipts are not raised. It may create (an) opportunity for fraudulent activities,” reads the report.
In its response, management said: “This scenario occurred during the time when the Finance Department was not staffed with qualified and experienced persons. Measures have since been put in place to ensure that all revenue is receipted.”
Online Reporter