Shurugwi financial records in a mess: AG

“I, therefore, could not satisfy myself as to the accuracy and validity of expenditure balances disclosed in the financial statements,” acting Auditor-General Rheah Kujinga said in the report.

AN audit of Shurugwi Town Council’s 2023 finances has revealed ZWL$340,01 million expenditure without supporting documents, raising serious concerns about financial mismanagement and non-compliance with accounting standards.

The findings, detailed in the Auditor-General (AG)’s 2024 report on local authorities, highlight a lack of invoices, receipts or payment vouchers to validate the expenditure — a direct violation of council’s own accounting policy. 

The report revealed that the ZWL$340,01 million expenditure had no supporting documents, leaving auditors unable to verify the accuracy of financial statements. 

“I, therefore, could not satisfy myself as to the accuracy and validity of expenditure balances disclosed in the financial statements,” acting Auditor-General Rheah Kujinga said in the report.

“This was contrary to council’s accounting procedure manual, which requires all expenditure to be supported with the requisite payment vouchers, supplier invoices, receipts and goods received vouchers.”

She said a ZWL$0,55 billion variance was found between payroll summaries and financial records.

Council blamed staff shortage for failure to conduct monthly payroll reconciliations.

“As a result, there was an unresolved variance of ZWL$0,55 billion between employee costs as per payroll summaries of ZWL$4,66 billion and the balance disclosed in the financial statements of ZWL$5,21 billion,” the report read.

The Auditor-General urged council to perform monthly payroll reconciliations and investigate variances.

The Auditor-General noted that council did not comply with International Public Sector Accounting Standard (IPSAS) 10 Financial Reporting in Hyperinflationary Economies.

“Had council adjusted its financial statements for hyper-inflation, the financial statements would have been materially different.”

AG said council did not include its land reserves in the asset register.

“As a result, council did not account for land reserves in the financial statements. This was contrary to IPSAS 45 — Property, Plant and Equipment paragraph 50 which requires land to be disclosed as a separate class where there is a deed of grant by the State, title deeds, permit, cession or warrant.”

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