Damning AUSC forensic report implicates, govt, LOC officials


A FORENSIC investigation into the African Union Sports Council (AUSC) Region 5 Under -20 Youth Games held in Bulawayo six years ago has uncovered significant financial irregularities and corruption resulting in the loss of millions of dollars.

The report was prepared by Deloitte. It exposed key government officials, local organising committee members and security forces.

The damning report estimates that millions were lost through delinquency and other widespread malpractices. The forensic audit was instigated by Cabinet in 2016 through the Ministry of Sport and Recreation.

The corruption and embezzlement of the funds transpired under the then Sports Minister Andrew Langa, who was fired from government a year later.

Government funded the 2014 games through Treasury releases to the Ministry of Sport and Recreation for the hosting of the games.

Treasury released US$17.2m to the ministry but it only accessed US$16.98m for the refurbishment of the sporting facilities in Bulawayo including White City Stadium, Barbourfields Stadium, Luveve Stadium, Bulawayo Athletics Club, Bulawayo Swimming Pool, Netball Courts, Games Village and Prefabricated houses, as well as acquisition of equipment.

The LOC also received additional funds from the AUSC Region V participating member States in tender fees, vending fees and grants from the Sports and Recreation Commission.

According to the report, the remaining US$238,261.24 remained unutilised and the amount was not received by the ministry. Due to delinquency, irregular payments and corruption, the report alleged that government lost millions of dollars.

The report also detailed a string of corruption allegations including payments of contractors who did not start or complete any work.

The report also raised questions about the escalation of costs on some of the projects.

The report found that top officials from the Ministry of Local Government, which was responsible for the refurbishment of sport venues and related infrastructure development including the sourcing of contractors and preparation of interim payment certificates, continued to sign off payments to contractors despite receiving complaints that work was not being done.

The report found out that costs for various infrastructure projects increased by more than 50% to nearly US$6m from the original scope of works, exceeding the 10% provision stipulated in the contract documents.

Most of these were signed off by Hillary Mukaratirwa, the director of architectural services at the Ministry of Local Government, Public Works and National Housing.

The contractors were paid but did a shoddy job, according to the report. Instead of paying suppliers through bank accounts, the report showed that significant cash payments were paid to suppliers.

The cash payments, according to the report created risks and opportunities for abuse The report also revealed that some contractors were paid but did not deliver the goods and services.

Some goods were even delivered after the closure of the games.

Apart from that huge amounts of dollars that were paid without adequate supporting documents, about US$1m was diverted and paid to a Chinese firm for projects not related to the games. There were also inflated prices.

One such example was when CMED overstated the rate for mini-bus rental by US$25,707.

The report exposed irregular payments that were made to several contractors who were engaged to rehabilitate sports infrastructures in Bulawayo which were used to host the AUSC games. These had, however, failed to meet mandatory tender requirements.

Some creditors on the ministry of Sports and Recreation creditors’ schedule, including Shoe Biz, Totally Uniforms, Contail Trading, were not valid creditors. As a result, government was prejudiced about US$7,968.10. LOC chief accountant David Mubariki and Simplisio Musekwa, the LOC administration and procurement director, could not explain the reasons for the existence of these entities on the list of suppliers owed by LOC, headed by Khonzani Ncube.

There was also poor workmanship on the facilities.

“Variation orders amounting to US$5,572, 957.93 were raised exceeding the 10% provision stipulated in the contract documents but were signed off by Mukaratirwa,” the report said.

“Olimas Engineering was awarded a contract of US$214, 923.50 to supply and install the water heating system at Bulawayo Swimming Pool. Variation orders of US$346,771.88 were also subsequently issued. Olimas Engineering was paid US$257,202.75.

The heating system was non-operational on the inspection date. “Goods amounting to US$38,617 were paid before the dissolution of local organizing committee and US$75,996.03 remained outstanding.

The amount owing of US$75,996.03 is included in the amount for the 88 suppliers contacted and verified to be valid creditors.” The report revealed that some expenditure was unaccounted for.

 “The use of cash increases the risk of misappropriation and or theft. (About) US$131,825.91 cannot be traced to payment vouchers indicative of an expenditure unaccounted for,” the report show.

The auditors noted that there was poor financial management and weak internal control systems. This resulted in the payment of goods amounting to US$2,216,328.79 without appropriate documentation such as internal requisitions, the required three quotations and purchase orders. Government could have been prejudiced about US$423,205.30 through unsubstantiated allowances.

“About) US$317,305.80 in allowances claims cannot be substantiated through appropriate documentations such as an authorized claim form.

Security forces received US$105,899.50 between the periods November 25, 2014 and December 15, 2014 in addition to receiving accommodation for the duration of the games.

We examined LOC payment vouchers and noted travel and subsistence payments to security forces (the army, police and OPC) personnel whose claim forms were not adequately completed.

These allowances were claimed and collected by a representative of each of the groups.”

There was also a payment of about US$1m which was made to China Nanchang Engineering for supposed works on Mutange and Tokwe Mukorsi Dams, two projects not related to the games.

The report revealed that the instruction letter was issued by Fidelis Ngororo, the director of public sector investment programme in the Ministry of Finance and Economic Development.

According to the letter, the report indicated that Treasury was supposed to repay the money during the same week it was diverted.

But as at the reporting date, the money had not been repaid, the report said.

There was no LOC asset register availed. As a result, the auditors could not quantify the total value of assets purchased by MOSR or LOC towards the games.

“We were not provided with an asset register of LOC assets. Musekwa verbally stated that the LOC had a physical register that was maintained by Mlindazi Mabhena, the LOC administrative assistant.

However, the register was incomplete at the conclusion of games and it could have been misplaced when LOC records were moved to Khumalo Hockey Stadium and Elangeni Training Centre.

As a result, we were unable to quantify the total value of assets purchased by Ministry of Sport or LOC towards the games and reconcile them to records. Failure to maintain asset register exposed LOC assets to possible theft or misappropriation,” the report said.


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