SOEs defy auditor-general

CLOUDINE MATOLA

Zimbabwe’s state-owned enterprises (SOEs) are failing to implement audit recommendations, with persistent financial reporting delays, weak internal controls and recurring audit findings exposing gaps in accountability and public-sector governance, Auditor-General Vimbai Chikwenhere has said.

She says recommendations raised year after year remain unimplemented, prompting calls for stronger monitoring systems, faster clearance of financial reporting backlogs and statutory powers to penalise deliberate non-compliance.

Speaking at the Chartered Governance and Accountancy Institute of Zimbabwe (CGI) annual conference in Johannesburg, South Africa, Chikwenhere said the repeated failure to act on audit findings had undermined efforts to improve governance across public entities.

“Year in, year out, the auditor-general proposes recommendations, raises findings, and then says these are the recommendations that need to be implemented in order to improve,” she said.

However, she said, successive annual reports continued to highlight recommendations that had not been implemented, with limited progress in addressing longstanding weaknesses.

Chikwenhere said stronger audit follow-up mechanisms were needed to ensure that public entities acted on findings promptly rather than waiting for the next annual audit cycle to assess progress.

The Office of the Auditor-General is developing a web-based audit recommendation tracking system that will allow auditors, public entities and members of the public to monitor implementation in real time.

The platform is intended to provide regular updates on progress, allowing stakeholders to assess whether institutions are addressing audit concerns and strengthening their internal controls.

“On a timely basis, we can be able to see what progress has been made in the last month, in the last few months, and be able to see what improvements have been made,” Chikwenhere said.

She said the system should go beyond being a compliance checklist and instead become a practical accountability tool for tracking reforms and measuring progress in resolving audit findings.

Chikwenhere also called for a targeted programme to clear financial reporting backlogs across public entities, some of which are reportedly up to three financial years behind in submitting their accounts.

The delays have been particularly pronounced in ministries’ appropriation accounts, complicating efforts to scrutinise public spending and establish whether funds have been properly accounted for.

She said the backlog could not be resolved without additional capacity and resources at both the Office of the Auditor-General and the Office of the Accountant-General.

This would include recruiting qualified professional accountants to prepare financial statements and strengthening audit teams to examine the accounts, she said.

Existing resource constraints were making it difficult for the two offices to clear outstanding work while meeting their regular reporting obligations.

“There is a need to fast-track the clearance of that backlog,” Chikwenhere said.

Beyond capacity challenges, she said, deliberate non-compliance required a stronger response from authorities.

Chikwenhere argued that Zimbabwe lacked adequate statutory provisions empowering the relevant authorities to impose sanctions for delayed financial reporting and failure to implement audit recommendations.

While some shortcomings stemmed from resource constraints, she said, others reflected deliberate disregard for compliance requirements, making consequence management essential.

“What is missing is the statutory provisions that empower the implementation of consequence management,” she said.

She also urged public entities to accelerate investment in digital systems, warning that continued reliance on manual processes was contributing to weak internal controls and exposing institutions to operational and accountability risks.

Despite growing emphasis on digital transformation, Chikwenhere said many public entities remained only partially automated, limiting the effectiveness of their financial management and control systems.

“The other reform that I would like to propose is to invest in digitalisation,” she said, adding that the continued use of manual systems remained a clear problem reflected in the Auditor-General’s reports.

For Zimbabwe’s public enterprises, the proposed reforms would need to translate into measurable improvements in reporting timeliness, implementation of audit recommendations and enforcement of accountability if recurring audit failures are to be addressed.