THE commission of inquiry investigating City of Harare officials and council on financial management issues dating back to 2017 has revealed that the local authority’s financial system is not consolidated as it does not incorporate subsidiaries.
In May, President Emmerson Mnangagwa appointed the commission led by retired judge Justice Maphios Cheda.
The commission yesterday told HCC acting finance director Godfrey Kusangaya that council’s accounting system is in shambles according to its findings.
In response, Kusangaya told the commission that the system is not consolidated because council operates partially with its subsidiary companies which include City Parking, Harare Quarry, Rufaro Marketing and Mabvazuva, among others.
“I will start with the consolidation of accounts from the subsidiaries. These were partial, we did not receive all of them. And the requirement is that we are supposed to consolidate all accounts from subsidiaries. Now, the fact that we are partial to the information from these subsidiaries and not the main from City Parking and other acquisitions, we were not able to consolidate [them]," Kusangaya said.
The commission of inquiry discovered that HCC had borrowed millions of dollars for salaries and terminal benefits for employees.
Kusangaya deflected the loan issue saying he was not yet in office when the application was made.
“On salaries, through the ministry, we are normally not allowed to borrow for paying salaries. I think it’s done for good reasons. You know we have got a budget for a year and you are supposed to confine all your expenditure in that year,” he responded.
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“Now, borrowing might entail that you are going to offer that into another year and there must be very good reasons why you should borrow to pay salaries. If an organisation is unable to pay salaries during the period, I think there are remedies that you should follow.
“Borrowing to pay salaries, like I am saying, is not allowed unless there are very good reasons or if there were very good reasons which should have justified the city council’s approach to say we want to borrow because of these reasons.”
Added Kusangaya: “In fact, because there was no ministerial approval, therefore, that act was wrongful and unlawful.”
The commission indicated that despite having the monthly revenue of ZiG200 million, the City of Harare is not able to deliver service to its ratepayers.
“It’s a budget issue. I think we are looking into all those issues. I also want to look at the number of employees we have,” Kusangaya said.
“We have a cost-cutting requirement. I would agree that if there are ways where we can reduce the wage bill, then transfer all the savings to service delivery. That would be very helpful.”
