The International Monetary Fund (IMF) has raised concern over the quality of financial statements at the National Social Security Authority (NSSA), some state-owned enterprises and local authorities.
The multilateral lender which suspended funding Zimbabwe’s development programmes due to the country’s ballooning debt and arrears has beeninstrumental in providing technical support to government in ensuring that its accounting system complies with international best practice.
Last month, an IMF mission was in Zimbabwe as part of its Enhanced Data Dissemination Initiative which seeks to improve the government accounting systems. This comes as part of government efforts to contain public spending.
“Financial Information for the NSSA is publicly available, however, this data is not produced using a standardised reporting format or system (SAP). Because of this, NSSA statistics are currently not consolidated with other general government finance statistics,” reads the IMF report in part.
“The mission recommends that the authorities review compliance with (Zimbabwe Public Finance Management Act 2009) ZPFMA09 across general government subsectors, including, all local government units, EBU funds and social security funds. This will require greater cooperation and communication between ministries, but would be extremely beneficial for the government’s ability to record and report comprehensive, and high quality, financial information to policymakers.”
The Accountant General, the IMF advised, should have the ability to impose a standardised method of accounting and reporting template based on best practice international standards across all sub-sectors of the general government (as set out in subsection (2) of Section 36 in ZPFMA09). This standardised methodology and content should be
integrated into the SAP system via the newly developed chart of accounts.
Local governments in Zimbabwe report financial information to the MoFED [Ministry of Finance and Economic Development] with varying degrees of financial information and a variety of templates. Some local government units are currently working on a new reporting framework with assistance from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) but the overall level of reporting to the AG’s office in Ministry of Finance of Finance Economic Development is quite poor with no standardised framework which is compatible with the SAP system. Note that this is not in compliance with the requirements of ZPFMA09,” the report reads
“Within the MoFED, financial reporting for financial public corporations is limited to information contained in reports submitted by these corporations. A low compliance rate with the requirements set out in ZPFMA09, along with the absence of a standardised reporting framework, significantly limits the MoFED’s ability to compile consolidated financial information for financial public corporations in a PSDSG/GFSM 2014 framework.”
The Auditor General has consistently produced high quality assessments of public corporations with recommendations which have been largely unfulfilled.
Since her appointment in early 2004, Auditor General Mildred Chiri has produced transparent annual reports, with very little follow up by ministries on recommendations contained within these reports.
NSSA, an autonomous social security fund, has been at loggerheads with lawmakers and government officials over its investment portfolio and pay-outs to pensioners and has in the past been rocked by poor corporate governance issues.