Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Bank blamed in GMB rot

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 

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.


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