A FORENSIC audit on the 2014 African Union Sports Council (AUSC) Region V Under-20 Youth Games hosted in Bulawayo has unearthed massive financial impropriety involving over US$5 million, with senior government officials and members of the security forces among those fingered in corrupt deals.
BY HENRY MHARA
The report, dated March 13, 2018, shows that millions of dollars could have been embezzled through poor financial management, excessive pricing, non-delivery of goods and services, substandard works, contract incompetency, payment to dormant shelf companies, fraud and other various corrupt deals.
NewsDay is in possession of the report compiled by Deloitte, which shows that the government availed US$17 733 566 for sport infrastructure refurbishment and other operational expenses for the games.
However, a huge chunk of that money was allegedly misappropriated or abused.
All the corruption and embezzlement of the funds happened under then Sports minister Andrew Langa, who lost his ministerial post the following year.
Langa had initially set a budget of US$46 million for the preparations and hosting of the games, but government availed $17 million.
He claimed after the games that the sporting facilities had been refurbished to meet international standards.
The hosting of the games required refurbishment of Barbourfields, Luveve and White City stadiums, Bulawayo Athletic Club (BAC), Bulawayo Swimming Pool and the Games Village at Hillside Teachers College as well as the procurement of ancillary equipment, goods and services.
But the government was not satisfied with the workmanship in relation to amounts paid and owing to contractors for work that had been done.
The government in May 2016 then requested that a forensic audit be done on the AUSC Games, which has since unearthed massive corruption.
The corrupt deals included awarding of contracts to companies without following tender procedures.
Raising eyebrows was the awarding of contracts to Drawcard Enterprises and Gimtrac for the rehabilitation of sports infrastructure to the tune of US$1 179 993,49 and US$2 091 040, respectively, without adhering to tender requirements.
Hillary Mukaratirwa, the director architectural services in the Local Government, Public Works and National Housing ministry, said they awarded contracts to the two companies without going to tender “due to the limited time before the commencement of the games”.
Drawcard’s work included the laying of a tartan track at the White City Stadium. But the report noted that they did a shoddy job and 300m of the track requires relaying and over US$1 million is needed to redo the job.
Three other companies; Olimas Engineering, Nextchir Construction and Asphalt Products, were also awarded contracts worth thousands of dollars, without meeting tender requirements. Inevitably, they either failed to do the job completely or did substandard work.
Olimas Engineering got a contract for US$214 923 for the installation of the heating system at Bulawayo Swimming Pool and years after the games, the system is non-functional.
The report also shows that there were companies on the creditors’ schedule, who were not owed as they were either paid in full or did not supply goods or services. Five suppliers with a total claim of US$7 968 appeared on the schedule.
Fifteen suppliers with invoices amounting to US$96 450 could not be located, with most of them having ceased operations or were “unknown at the given addresses”.
Local organising committee (Loc) chief accountant David Mubariki could not explain the reasons for the existence of the entities on the list.
The list also showed that there were claims of unpaid travel and subsistence allowances for Loc officials. A total of US$ 317 305 in allowances owed could not be substantiated through appropriate documentation such as authorised claim forms. There was no documentation detailing to whom these allowances were due.
The Loc officials were accused of increasing their daily allowances without following due process. Treasury set the daily allowance for bed and breakfast, lunch and dinner at a total US$55 a person, but the officials were paying themselves US$150 instead.
Instances of poor financial management and weak internal control resulted in the payment for goods valued at US$2 216 328 without appropriate documentation such as internal requisitions, three quotations and purchase orders. An amount of US$131 825 was withdrawn from one of the Loc FBC Bank account, but could not be traced to payment vouchers.
“The use of cash increases the risk of misappropriation and/or theft. US$131 825,91 cannot be traced to payment vouchers indicative of an expenditure unaccounted for,” the report reads.
The report also showed that some companies could have over-priced their goods and services to reap off Loc.
“We examined the CMED claim amounting to US$293 691. We noted that CMED charged a rate of US$1 503 per day for a rental of a Mercedes Benz minibus for the duration of 19 days. The rate used should have been US$150 per day, which would have been consistent with the other CMED invoices for a vehicle of a similar size. The creditors amount of US$293 691 is overstated by US$25 707.”
It is alleged that at least over US$1 million was diverted towards projects not related to the games and the amount was never recovered.
“We examined the IDBZ Bank statement and noted a payment of US$1 000 000 to China Nanchang Engineering for works on Mutange and Tokwe Mukosi dams. The instruction letter was issued by Fidelis Ngorora, director (public sector investment programme) in the Finance and Economic Development ministry. According to the letter, Treasury was to repay the money during the same week it was diverted. As at the reporting date, the money had not been repaid,” read the report
Loc also received goods and services amounting to US$114 613 after the closure of the games on December 14. The goods included beds, play station consoles, shoes, printers, television sets, sports regalia and other consumables. The beds were given to Hillside Teachers College. It could not be ascertained how the other items were distributed.
The auditors complained that they faced difficulties in accessing records, including the games asset register.
“Based on our observations, the quality of workmanship at numerous locations was not commensurate with the expenditure incurred. Games sites are still incomplete and have not been officially handed over to the Local Government Public Works and National Housing ministry, as such they have not been maintained since the completion of the games.”