SPEND IT LIKE ZINARA

• Bosses take $9k monthly for ‘holiday’

• $140,000 vehicle loans for executives

Zvamaida Murwira Harare Bureau
THE government could have been prejudiced of more than $11 million after the Zimbabwe National Road Administration (Zinara) failed to deduct $7,5 million being 10 percent withholding tax to 23 suppliers that had no tax clearance, and went on to make a payment of $4,1 million to creditors without authorised payment vouchers, an audit has revealed.

According to the audit, Zinara senior management were paying themselves hefty monthly allowances including $9,000 holiday allowance per individual outside the payroll, prejudicing the Zimbabwe Revenue Authority of revenue in tax.

Zinara collects about $50 million annually from vehicle licensing, and as of March this year it reported that it was collecting $23,7 million from tollgates on the country’s highways.

Zinara is one of the seven State entities that had an adverse report from Auditor General, Mildred Chiri, in her 2014 report that was made available yesterday.

The Zimbabwe Mining Development Corporation paid $3,1 million on corporate social responsibility with no breakdowns, acknowledgement of receipts from beneficiaries and gave non executive directors 2,940 litres per individual with $27,450 holiday allowance each without the parent ministry’s approval.

The Environmental Management Agency board raised its own fees without approval from the parent ministry while the Health Services Board approved increased fuel allocations for board members without the concurrence of Treasury among other ills noted.

On Zinara, Chiri said the Administration dealt with suppliers that had no valid tax clearance and had paid $75 million to 23 suppliers, prejudicing Zimra of $7,5 million in tax.

“I observed that Zinara did not deduct 10 percent withholding tax for payments made to suppliers without a valid tax clearance certificates,” she said.

Some of the firms were Infralink ($63,7 million), Twalumba Civils ($2,4 million), Group Five Engineering ($200,000), Heritage Agro Equipment ($2,4 million), Badon Enterprises ($2,4 million), Fremus Enterprise ($2,2 millon), Applied Weighing Scale ($200,000), Bitumen, Brown Engineering, Forit, Cortman Investments, Gratic Trading, Easthset, Gramaton and Tegasteel among others.

In response, Zinara management told the auditors that tax clearances lapsed after the firms were already contracted, leading to the exposure but said efforts to recover the money were on course.

“Infralink has been part of Zinara and was formed only for the purposes of acquiring DBSA loan and repayment thereof. Zimra had two of its commissioners conflicting on Infralink registration for VAT and income taxes. One commissioner registered it and another de-registered it. This brought confusion and the likely exposure,” read the brief response.

On the $4,1 million payment that occurred between 2012 and 2013, Chiri said in terms of Zinara standing instructions, for payment to be made, a payment voucher and the bank transfer request should be authorised by the relevant signatories.

“I observed that payments amounting to $4,157,937 were made without authorisation since the payment vouchers were not signed by the relevant signatories. The risk is that fraud and errors may not be detected resulting in financial loss to the organisation,” she said.

It was noted that management paid themselves allowances outside the payroll thereby circumventing payment of tax.

The monthly allowances were home telephone ($225), entertainment ($750), home security (24 hours), private fuel (750 litres) and holiday allowance ($9,000.)

“Vehicle loans amounting to $140,000 availed to each of the directors were above the authorised $100,000 in the contracts of employment,” she said.

Former Zinara CEO, Frank Chitukutuku, unilaterally increased his salary from July to December 2013, said Chiri.

The Administration bought a Jeep Grand Cherokee and office furniture for an official in the parent ministry worth $83,000 and $10,230 respectively.

“I also noted that on December 28, 2012, the Administration paid for Christmas hampers worth $173,000 to staff at the parent ministry in violation of the Roads Act,” Chiri said.

The Administration disbursed funds to local authorities beyond the budgeted allocations as high as 1,503 percent while others received nothing.

For example, the Department of Roads got $14,3 million against an allocation of $3,3 million, Rusape town council got $668,000 against an allocation of $93,000 in 2013 while in 2012 it got $992,000 against an allocation of $124,000.

Kariba urban council did not get anything in the two years while it had an allocation of $150,000 (2012) and $94,000 (2013).