ACTING auditor general Rheah Kujinga has queried the validity of financial statements submitted by National Handling Services (NHS) after the air and dry port handling outfit failed to provide data relating to its Namibia based subsidiary, NHS CC Namibia Walvis Bay.
The financial statements relate to the year ended December 31, 2022.
NHS has been controlling the business, a subsidiary, since 2019.
So deep were concerns over NHS’ actions that Kujinga said she could not give an opinion to the financial statements, saying they also flouted the Public Finance Management Act (PFMA).
The Act governs the operations of state owned enterprises (SoEs).
In a commentary, Kujinga said incomplete financial statements exposed public funds to potential ‘fraud’.
She added that ‘errors may not be detected and decision making may be compromised’.
Her comments were part of a string of misgivings by the Auditor General Office over a rot in governance and mismanagement in SoEs, covering the period 2019 to 2023.
“The company did not consolidate the financial statements of its subsidiary based in Namibia (NHS CC Namibia Walvis Bay) which it has been controlling since 2019,” Kujinga said in the audit report, which was submitted to Parliament recently.
“No financial information was availed for audit pertaining to the subsidiary.
“This was contrary to the requirements of the Public Finance Management Act, which requires that the annual report include financial statements of all subsidiaries of the reporting entity,” read the report.
“During the performance of my audit I was not availed with information which relates to the NHS CC Namibia for the purposes of consolidation.
“It is the significance of this limitation of scope that I was unable to express an opinion on these financial statements.
She said if a company had control over another business, it was required to make full disclosures about the operations of its investee.
“This has, however, not been effected to the preparation of these financial statements as no financial statements were prepared by NHS CC Namibia,”Kujinga said.
She noted that the NHS should address issues raised by her audit.
Responding to the AG’s observations, NHS management said an ‘appointed to audit the Zimbabwe Dryport has now completed audits for 2019 to 2022 and these will be consolidated together with the 2023 financial statements’.
President Emmerson Mnangagwa commissioned the Walvis Bay dry port in 2029 to expand Zimbabwe’s access to international markets.
The facility was built on land donated to Zimbabwe by Namibia, and is strategically located to unlock access for Zimbabwe to the Atlantic Ocean, with easier access to West African markets, along with others in South America and Europe.