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By Correspondent
The Auditor-General’s report for 2022 focusing on Councils has unearthed various misdemeanors and illegalities.
Below we profile, verbatim, some of those uncovered for Harare City Council.
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“Non-Compliance with International Public Sector Accounting Standard 17 -“Property, Plant and Equipment”.
The City of Harare did not correctly recognise the items of property, plant and equipment disclosed in the financial statements at ZWL505 545 227 in accordance with IPSAS 17,“Property, Plant and Equipment”.
Following the change in currency from USD to ZWL in October 2018 as per IPSAS 4 and the onset of hyperinflationary economic conditions, the City of Harare has not restated property, plant and equipment for inflationary effects per requirements of IPSAS 10.
No professional valuation of the assets was done as at December 31, 2019.
I was not able to obtain sufficient appropriate audit evidence for property, plant and equipment due to the poor status of the accounting records.
Therefore, I was not able to confirm the valuation of property, plant and equipment by alternative means.
Non-Compliance with International Public Sector Accounting Standard 26 -“Impairment of Non-Cash Generating Assets”
The City of Harare owned old plant and equipment.
However, the City did not perform formal and credible impairment tests in accordance with IPSAS 26, “Impairment of CashGenerating Assets” and IPSAS 21, “Impairment of Non-Cash-Generating Assets”.
I was not able to obtain sufficient appropriate audit evidence for property, plant and equipment due to the poor status of the accounting records.
Therefore, I was not able to confirm the valuation of property, plant and equipment by alternative means.
Non-Compliance with International Public Sector Accounting Standard 16 -“Investment Property”.
The City of Harare did not correctly recognise the items Investment property disclosed in the financial statements at ZWL4 615 000 in accordance with IPSAS 16, Investment Properties”.
Following the change in currency from USD to ZWL in October 2018 as per IPSAS 4 and the onset of hyperinflationary economic conditions, the City of Harare has not restated investment property for inflationary effects per requirements of IPSAS 10.
No professional valuation of the assets was done as at December 31, 2019.
I was not able to obtain sufficient appropriate audit evidence for investment property due to the poor status of the accounting records.
Therefore, I was not able to confirm the valuation property, plant and equipment by alternative means.
Non-Compliance with International Public Sector Accounting Sector 12 -“Inventories’’
The City of Harare did not separately and correctly recognise the items of inventory asset with a carrying amount of ZWL145.3 million in accordance with IPSAS 12, “Inventories”.
According to IPSAS 12, inventories are required to be measured at the lower of cost and net realisable value.
In addition, I was not able to obtain sufficient appropriate audit evidence on inventory with a carrying amount of, due to the poor status of the accounting records and nonsubmission of information in support of these accounts.
I was not able to confirm inventory and biological asset balances by alternative means.
Non-Compliance with International Public Sector Accounting Standards (IPSAS) 27 – “Agriculture”
The City of Harare did not separately and correctly recognise the items of biological asset with a carrying amount of ZWL 2 245 505 in accordance with IPSAS 27, “Agriculture”.
IPSAS 27 requires all biological assets to be measured at fair value less costs to sell.
Any change in the fair value of biological assets during a period is reported in surplus or deficit.
In addition, I was not able to obtain sufficient appropriate audit evidence on inventory and biological asset balances, due to the poor status of the accounting records and nonsubmission of information in support of these accounts.
I was not able to confirm biological asset balances by alternative means.