MARTIN MAWAYA
GWERU—Shurugwi Town Council diverted ZwG47.91 million earmarked for estate development to finance recurrent operations, leaving the funds unrecovered at the end of 2024, the Auditor-General has reported.
Council management attributed the failure to restore the funds due to liquidity constraints, according to the audit report on the council’s 2024 financial statements.
“The council utilised estates funds amounting to ZWG47.91 million for recurrent expenditure,” Auditor-General Vimbai Chikwenhere said.
The diversion was among several financial irregularities that resulted in an adverse audit opinion, with auditors concluding that the council’s financial statements did not fairly potray its financial position, performance, and cash flows in accordance with International Public Sector Accounting Standards (IPSAS).
The Auditor-General also flagged the council for incorrectly accounting for ZWG87.5 million from stand sales on a cash basis instead of the accrual basis required under IPSAS 47.
The amount included receipts from stands sold in previous years, resulting in a material misstatement of the financial statements.
Chikwenhere said the accounts would have been materially different had the council complied with the standard procedure.
The local authority also failed to account for its land reserve, while investment property valued at ZWG0.11 million was not disclosed at fair value.
More than ZWG1.5 million in expenditure lacked adequate supporting documentation, while a separate audit finding identified ZWG4.9 million in unsupported expenditure.
These gaps and discrepancies prevented auditors from determining whether the expenditure was valid and accurately recorded.
Management indicated that some documents, including goods received vouchers, had been misplaced and that efforts were underway to strengthen the filing system.
Payables amounting to ZWG1.52 million were also not supported by supplier statements or reconciliations, making it impossible for auditors to verify their accuracy, completeness, and valuation.
The local authority also paid its chairperson a monthly fuel benefit of US$3,726 without approval from the parent ministry, with management saying the benefit was intended for official council business but had been suspended pending ministerial approval.
The audit found that financial weaknesses persisted despite previous recommendations, with six of the eight issues raised in the previous audit still unresolved.
These issues included unsupported expenditure, failure to prepare monthly payroll reconciliations, the absence of a comprehensive land register and delays in rehabilitating water infrastructure.
Challenges relating to sewerage reticulation and non-revenue water also remained unresolved.
A generator purchased in January 2022 had not been delivered at the time of the 2024 audit.
In its response, the council said it had revalued land and other assets in 2025 and was engaging suppliers to obtain outstanding statements and confirmations.
The Auditor-General recommended stricter compliance with accounting standards, improved documentation of expenditure and payables, proper recognition of land assets and ensuring estate funds were used solely for their intended capital development projects.
