Mangoma touches nerve

The report reveals that some of the explanations given by top management on questionable decisions were not entirely correct, and in some cases NOCZIM management admitted that they had misappropriated funds.

The report titled: Draft Report on the forensic audit of the National Oil Company of Zimbabwe (NOCZIM), unearths serious financial malpractice and outright lies told to the Ministry of Energy and Power Development. The auditors show how NOCZIM made donations to the Ministry when the company was in financial distress. It shows

ineffective decision making by senior management, non-compliance with the provisions of the statute and inappropriate accounting records among many other findings.

Inconsistencies

The report shows that NOCZIM did not accurately reflect the cost of stands bought from Divine Homes (Pvt) Ltd.

We noted that the information and reports produced by NOCZIM management and submitted to the various stakeholders was inconsistent and at times did not show an accurate state of affairs at NOCZIM as shown below, the auditors said in their report.

It was discovered that some of the decisions made by NOCZIM management did not bring optimal benefits for the company and some of these decisions caused the financial stress that NOCZIM ended up in. For example, the purchase of non income generating assets such as the Gletwyn stands, expensive motor vehicles for managers and donations to the MOEDP when the company was in financial distress.

We noted some of the explanations provided by NOCZIM management to the Board and the MOEPD did not fully represent the full picture of the transactions or what actually transpired, the reporter stated.

In particular the explanation provided by NOCZIM management on the reasons for non-payment of ZIMRA duty was not entirely correct. It was only correct to the effect that NOCZIM admitted that they had misappropriated funds they were holding in fiduciary capacity on behalf of ZIMRA and the GoZ, the auditors said.

Other inaccurate statements provided by NOCZIM where that in a paper on suggested solution to challenges faced by NOCZIM which was presented to the MOEPD the total cost of land and buildings acquired was disclosed as US$134.370, but the purchase of the Gletwyn stands was US$444.230.

Dead stock

The dead stock composition as at 30 June 2010 included, 2.4 million litres described by NOCZIM management as being untradeable interface.

The auditors also noted that NOCZIM did not have separate bank accounts for funds on behalf of other institutions except for the debt redemption fund.

All these funds are deposited into NOCZIM operated bank accounts and NOCZIM CEO, (both former and currently acting Mr Churu, Mr Mashange, Mr Revanawako and Ms Mangezi) had overall authority to decide on the use of these deposited funds and to determine which payments to prioritise, the report says.

The audit report also says that since NOCZIM is a collection agent for ZIMRA, ZINARA and the GoZ (in the case of levies) they have fiduciary duty to remit all funds and used them for other purposes in breach of the principal agent relationship

which could bear legal implications especially given the fact that NOCZIM also did not remit the full levies to ZIMRA as they were supposed to.

Secondly the balance of US$2 million that was paid in the current period may not be directly linked to ZIMRA funds diversion as NOCZIM CEOs simply gave instructions to make payments from funds available in NOCZIMPs bank account except the debt redemption without identifying the sources of the funds. Given the nature of accounting for ZIMRA funds done by NOCZIM, it is not possible to establish whether or not the funds deposited into their bank accounts are for other institutions except for the debt redemption which is deposited in to a separate account by ZIMRA. This indicates that NOCZIM then used funds meant for ZIMRA in their day to day operations.

We confirmed that the signatories to the redemption account are Mr (Justin) Mupamhanga representative from the MOEPD, Mr Sikwila and Mr Mhaka. Authority from the MOEPD should be sought whenever NOCZIM wants to use the funds to redeem debt incurred in the procurement of petroleum products. We also noted application of the funds for any purposes outside redeeming NOCZIMs debt should be authorised by the Secretary in the Ministry of Finance, the auditors said.

Milking public funds

NOCZIM has for the past decade been one of the parastatals used by senior government officials to milk public funds. The parastatal has been perpetually broke and failed to import fuel into the country. Against the above background, Mangoma was arrested last week Thursday on trumped up corruption charges and he was at Harare Remand Prison after the State indicted him on Friday.

The High Court on Tuesday granted Mangoma bail of US$5 000. The prison officers on Sunday denied Mangomas relatives and senior MDC officials a chance to see him after they visited him saying they had orders from above to do that. Addressing a press conference at Harvest House last week, President Tsvangirai said Mangomas arrest was barbaric and senseless.

His arrest is nothing but a continuation of the calculated assault on the people of Zimbabwe. The fact that a Cabinet minister can be arrested by a constable is a reflection of Zanu (PF)s total disregard to the basic tenets of decency, said Tsvangirai.