AN explosive forensic audit report has uncovered that the Public Service Medical Aid Society (Psmas) concealed investment assets worth US$20 million, including the purchase of non-existent land in Zambia valued at US$1,2 million.
The report, compiled by Reynolds Muza of Ralph Bomment Practitioners, reveals that Zimbabwe's largest medical aid provider by subscriber base suffered a loss of approximately US$60 million due to corruption and gross mismanagement between 2018 and July 2022.
During this period, Psmas struggled to provide medical services to its subscribers, most of whom are civil servants, with some service providers refusing to accept the medical aid due to unpaid debts.
Presenting parts of the audit report during this week's annual general meeting, Muza disclosed that rampant corruption had driven Psmas into significant financial losses during the review period.
The report has since been submitted to the Office of the President and Cabinet (OPC).
“There are more than 50 properties including shopping malls. The rentals from those properties were never declared,” Muza pointed out.
“They were supposed to come to Psmas so that it treats them as investment income which can be applied to clear your medical claims. If you were to dispose of these properties tomorrow, Psmas will have more than US$20 million in the bank.”
Muza also highlighted a fraudulent transaction involving the purchase of an "opaque property" in Zambia at a cost of US$1,2 million.
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“I do not know whether you were informed, but you went on to buy land in Zambia called Kasama for US$1,2 million and it’s a non-existent property,” he told members at the AGM.
“We visited Zambia as part of our forensic investigation. That property does not exist but was a scam,” Muza further stated.
The audit report further exposes a complex web of "nefarious transactions" involving medical practitioners, Psmas members, management, and external parties, which left the organisation in financial ruin.
These illicit activities included the inflation of medical claims, which resulted in millions of dollars being siphoned from Psmas.
“However, what we found out was that Psmas was put into a serious mess because of what we termed nefarious transactions,” Muza said.
“These nefarious transactions covered the medical practitioners themselves, some of the Psmas’ members, management itself, so what happened is that we had so many duplications of claims.
“We are saying where a member of Psmas visits a medical practitioner, say you are suffering from a headache, but when the practitioner raises a claim, you are just made to sign and you walk away while the practitioner will probably say you did not report a headache, but you came for an operation,” he explained.
Muza also pointed out that Psmas had established several entities, including a gold-buying company called Clay Dust, which allegedly did not benefit members.
“What we found out (is) … that Psmas went on to establish a holding company, which became more like the owner of Psmas,” he said.
“To form this company, you as members did not give your nods up front, which means the Psmas holding company was not operating constitutionally on day one.
“Maybe it later on changed, but on day one it was not operating with your authority. So, there is no way that Psmas can become a subordinate to another institution, which makes money from your funding or contributions,” Muza said.
