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Eddie Chikamhi
Senior Sports Reporter
THE Zimbabwe Football Association could have been prejudiced of more US$617 915.95 and $73 million in local currency after a forensic audit conducted by an independent firm unearthed massive financial irregularities at 53 Livingstone Avenue.
This was revealed in a forensic audit report that was released by the Sports and Recreation Commission yesterday.
The audit, which covered the period between December 1, 2018 and November 30, 2021 when Felton Kamambo was the ZIFA president, was conducted by BDO Zimbabwe Chartered Accountants.
The auditing firm observed that in many instances the ZIFA board flouted corporate governance tenets and that the management of funds at the association was done in a haphazard manner.
The association’s bank accounts were continually raided and in many cases there were no supporting documents to explain why and how the money, obtained from different sources of income, was used.
Some of the questionable transactions included the unexplained withdrawal of funds, the unexplained movement of funds across accounts in breach of the provisions of corporate governance, the omission of FIFA grants from the ZIFA books and there were also clear cases of conflict of interest in the awarding of tenders.
As a result, a total of US$617 915.95 and ZW$73 897 760.63 could have been misappropriated over a period of three years.
The auditors could not establish the exact extent of the prejudice as they faced stiff resistance from some of the sacked board members from the Kamambo executive. The AWOL ZIFA chief executive officer Joseph Mamutse also made the audit process difficult.
“There were several instances where we were not availed supporting documents for some transactions during the period under investigation,” read part of the BDO report.
“It could be that funds relating to the missing documents were misappropriated or there was a filing problem. Since we could not establish the reasons with certainty, we have included such areas as potential losses.”
“We have included all information that we came across which is relevant to the scope of our work. However, it is possible that documents and information exist which were not made available to us or which we were unable to locate.
“We were not given information by Banks regarding the sale of foreign currency to third parties hence we could not establish if all such transactions were above board.
“Some of the officials who were ZIFA board members during the period under investigation did not respond to our questionnaires hence their explanations are not included in this report.
“Any document or information brought to our attention after the date of this report which would affect our findings will require our report to be adjusted accordingly.
The report was handed to ZIFA acting president Gift Banda yesterday and is expected to dominate the agenda at the upcoming Annual General Meeting.
Law enforcement agents like the Zimbabwe Republic Police and the Zimbabwe Anti-Corruption Unit are likely to be called in to conduct further investigations and those caught on the wrong side are set to face prosecution.
There was widespread abuse of funds, according to the forensic audit report, with FIFA development funds and the Covid-19 relief package also falling victim to the alleged corrupt tendencies.
Eyebrows were raised after it was revealed that the ZIFA board members shared between themselves US$100 000, with each getting at least US$15 500 as administration fees, from the US$1.8 million Covid-19 relief package from CAF and FIFA, at a time football clubs were struggling during the pandemic.
According to the report, the biggest beneficiaries included Kamambo (US$20 000) and his close ally Philemon Machana (US$18 000), with board members Farai Jere, Bryton Malandule, Barbara Chikosi and Sugar Chagonda getting US$15 500 each.
“The officials who are listed above were board members during 2020 when the above payments were made.
“We held a meeting with one of the directors, Ms. Barbara Chikosi, at 3 Baines Avenue on 15 September 2022 and she explained that her understanding was that the US$15,000 that she was paid was Board allowances which were due to her.
“We were, however, not able to get confirmation from Mr Machana (Board member finance) as he did not respond to our questionnaire.
“We analyzed the 2020 proposed budget and established that board members were entitled to (US$37 129.67 to cover all the board members in allowances for the four meetings to be held during the year).
“Due to lack of adequate supporting documents and explanations, we were unable to conclusively establish if the US$100 000 paid using Covid-19 grant was for genuine accruals of board fees,” reads the report.
The clubs also went on to get a pittance in local currency as a Covid-19 bailout package when football was struggling to stay afloat. There were also outstanding amounts from that package which were never accounted for.
“An amount of US$194,000 which was supposed to be paid to referees, coaches transport, referees’ expenses, had not been paid at the time of the investigation.
“The funds are no longer in ZIFA’s bank accounts as they were used for other purposes. No explanation was given to us as to why the beneficiaries were not paid and how the funds were used,” read the report.
Other disturbing transactions are how the association received loans from a company owned by the former board member and also repaid some loans without paperwork supporting the so-called debts or ratifications from the ZIFA board approving these loans.
For instance, in 2021, “ZIFA made payments of US$25,600.00 and US$19,800.00 to Conduit Investments and Sports Unlimited respectively,” explained BDO.
“Were told by the Bookkeeper that they were loan repayments, however the loan agreements were not availed to enable us to validate this assertion.
“The Conduit loan was to meet CHAN 2020 expenses, but we were not able to verify how the funds from Sports Unlimited were used due to lack of supporting documents.
“Mr Machana was a shareholder and director of Conduit Investments whereas Mr. Givemore Chidhakwa was a director. We were not availed evidence that the two officials declared their interests on this transaction with ZIFA.”
FIFA grants meant for football development were also allegedly ransacked, with little going to the intended beneficiaries.
“ZIFA being a member association of FIFA, for the period under investigation, was entitled to receive an annual grant of US$1,000,000 for a four-year cycle 2019 to 2022, allocated to support operational needs and development projects, and an additional grant of US$3,000,000 over the same four-year cycle to support specific projects, travel, accommodation and equipment needs under the FIFA forward program.
“The grant of US$182,700 received on 20 December 2018 was omitted from the Association’s books of accounts for 2018.
“The grant was deposited into a FIFA designated Ecobank account number 0181197610292101 which had been recently opened on 20 December 2018 by Kamambo, Machana and Mamutse, who were the signatories.
“According to the Accountant, the new bank account had not been disclosed to the finance department by the end of the 2018 financial year, hence the omission of the grant from the financial statements.
“On 24 December 2018, an amount of US$50,000 was transferred from the new bank account into the ZIFA General account number 00110976102921027 and accounted for as Sponsorship income on posting to the ledger.
“We also noted three cash withdrawals of US$10,000 each made in the name of Mr. Mamutse, from the Ecobank account on 21 December 2018, 24 December 2018, and 28 December 2018 respectively.
“We could not trace the cash withdrawals to the accounting records of ZIFA and no supporting documents were availed to show how the funds were utilised.
“Any two of the signatories to the new Ecobank account could sign, however, we could not establish the two signatories for the cash withdrawals because of lack of supporting documents.
“The remaining bank balance of US$102,319.97, after deducting US$50,000, US$30,000 and bank charges of US$380.03 was reported as grant income in the 2019 financial statements.
“This bank account then became the main FIFA designated account in 2019 where most of the funds from FIFA were now being deposited.
“It should be noted that we are unable to confirm whether there are other ZIFA bank accounts which were opened and operated during the period under audit without the knowledge of the finance team.
“ZIFA should consider engaging the RBZ so that it can compel all banks to disclose information of all bank accounts which were opened and operated during the period under audit,” reads the report.
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