Bank blamed in GMB rot
By Lloyd Mbiba, Staff Writer
Tuesday, 27 March 2012 01:45
HARARE – Agricultural Development Bank of Zimbabwe (Agribank) has
contributed to the rot in the Grain Marketing Board (GMB) by exposing the
state parastatal to losses of funds through a weak banking system, according
to an audit conducted by a local accounting firm.
The audit report by Ruzengwe and Company (chartered accountants) copied to
the Comptroller and Auditor General for the year 2010 reveals that Agribank
failed to help GMB manage its account.
The audit report reads “The board is exposed to the Agribank in relation to
farmer deposits and depot input payments. A total of $7 627 866 worth of
input sales proceeds for the year under review are expected to come through
this bank.
“Apart from the above, at least $40 million worth of government inputs were
being distributed around the country with proceeds being expected to come
through this bank and other banks.”
“Agribank has failed to assist the board in identifying the origin of
deposits getting into the board bank account. The GMB, as a result has
failed to accurately account for input proceeds as it is difficult to
establish the origin of deposits. The board could be losing funds through
this weakness.”
Apart from the exposure risks emanating from Agribank, GMB is exposed to
inefficiency risk as it is carrying too many employees with no related
activity something which is costing the company.
The Daily News last week revealed that the parastatal’s wage bill is more
than twice the revenue generated from commercial activities.
Furthermore, the board also has inefficiencies embedded in the system as key
decision-making functions are not performing to set standards.
The audit noted that the production and marketing sections led the board
into losses, through production of mealie-meal with no related demand and
entering into a flawed toll milling contract with Centra Private Limited.
The finance section has compounded this situation by failing to accurately
and timely account for funds being generated as well as inputs and intake
sale proceeds.
GMB’s internal control system covering the accounting system, management
attitude to internal controls, co-ordination and control of operations has a
weakness in reviewing evaluation and identification of any leakages.
The report said GMB is not fully utilising the Systems Applications and
Products (SAP) accounting system and is instead making use of excel spread
sheets to keep its accounts.
The use of spread sheets is not suitable for organisations as big as GMB,
the audit report stated.
“Spread sheets are easy to manipulate in the absence of tight monitoring
controls, since editing could be done at ease without any authorisation. The
use of spread sheets makes it difficult to identify incomplete entries as
single entries can be accepted for processing,” the audit noted.
GMB has ineffective management control and monitoring tools as provincial
accountants failed to produce basic accounting records and reports.
Provinces are the main source of information for management and financial
reporting processes.
This has compromised GMB’s financial reporting because of the failure of
provincial financial departments to avail basic accounting data, noted the
report.
The loss-making parastatal has a duplication of efforts and inappropriate
duty allocation says the report.
The audit observed that the operations manager had duties which coincided
with the procurement and administration manager and the logistics and
distribution manager.
Due to a weak management structure, there is negligence in the execution of
duties by GMB employees the auditors said.
“There has been evidence of negligence in the execution of duties by some
employees including management. For example about 120 tonnes of rice
(translating to $95 771) was lost as a result of negligence of duty by an
officer in the logistics department who contracted a transporter without
proper background checks and capacity checks on the transporter.
The then logistic manager should have checked the authenticity of the
transporter,” read the audit report.