Council resubmits budget for approval

The Ministry of Local Government and Public Works is still considering the re-submitted Harare City Council 2024 budget which it rejected for failing to meet required expectations, the director of communications and advocacy in the ministry, Mr Gabriel Masvora, said yesterday.

Last year, the ministry rejected the 2024 budgets for the Harare City Council and the Hwange Local Board for failing to comply with the guidelines spelt out in the recently launched local authorities’ service delivery blueprint.

President Mnangagwa launched the blueprint in November last year titled; “A Call for Action, No Compromise to Service Delivery”.

It was meant to guide local authorities’ programmes to ensure they are in line with the national vision to become an upper middle-income economy by 2030.

Mr Masvora said the Harare City Council managed to beat the April 19 deadline to re-submit the budget, and it was now being scrutinised to ascertain whether the anomalies picked in the original one were rectified.

The city council was directed to provide a satisfactory roadmap outlining when it expected to rectify the shortcomings that were identified, although it was not expected to do so overnight.

In particular, Mr Masvora said the local authority was directed to adopt the Enterprise Resource Planning (ERP) system for managing its financial accounts, whose absence has contributed significantly to revenue leaks over the years as its accounting system is in shambles.

ERP is usually referred to as a category of business management software, typically a suite of integrated applications that an organisation can use to collect, store, manage and interpret data from many business activities.

It tracks business resources including cash, raw materials, production capacity, and the status of business commitments such as orders, purchase orders, and payroll.

The applications that make up the system share data across various departments such as manufacturing, purchasing, sales, accounting, and others.

Mr Masvora said the Ministry appreciated that some of the things expected of the local authority could not be implemented overnight, with the ERP being an example.

For example, US$20 million is required to put it in place. It is not something which you can demand to be done overnight, as it is impossible to raise that kind of money within a short period.

“That is when a roadmap is required outlining that for us to have an ERP, say in the next three years, we are setting aside so much money,” he said.

Mr Masvora said the ministry would make a public announcement on whether the revised budget had been approved, but could not give the timeline.

Last year, Parliament slammed the Harare City Council for operating without a proper accounting system for three years, which could have prejudiced it of millions of dollars.

It was noted that the local authority has been operating without a requisite accounting system since 2019 after a supplier of the ERP, Quill Associates, withdrew its software following a contractual wrangle.

Former Local Government Minister Winston Chitando cited the absence of a functional computer-based organisational system, overstaffing and unaudited accounts, among other anomalies in rejecting the Harare budget.

“Harare City Council does not have a functional computer-based organisational system (Enterprise Resource Planning — ERP) and this has contributed greatly to low revenue collection.

“The Parliament of Zimbabwe and Auditor-General recommendations to reinstate the previous ERP have not been complied with,” he said.

The council has reportedly failed to procure an ERP for the past five years.

“This has contributed to low revenue collection and consequently poor service delivery.

“There is no provision in the 2024 budget to address this situation.”

The city’s budget proposal was, therefore, an inaccurate reflection of the council’s revenue generation capacity, he added.

Minister Chitando said Harare failed to provide solutions in its budget to address recurring audit disclaimers.

He said in terms of Section 49 of the Public Finance Management Act, all local authorities must be audited by May 31 annually.

“However, Harare City Council is in violation of the aforementioned provision,” he continued.

“Council is behind in audits.

“Financial statements for 2017, 2018 and 2019 received a disclaimer of opinion by the external auditor, a firm of chartered accountants.

“The disclaimer of opinion means that the external auditor did not obtain sufficient and appropriate evidence to provide a basis for an audit opinion.

“The 2024 budget presented does not indicate any meaningful steps to address this matter.”

Harare, he added, also has a huge debtors bill extending to over three years, a development that is negatively affecting its cash flow.

“Estates funds are not being managed according to the law,” he continued.

“Section 300 of the Urban Councils Act stipulates that proceeds realised from the sale of land are capital funds, which should not be used to meet operational costs.

“City of Harare is not complying with the provisions of this Act.”

Review of the city’s proposed budget also revealed serious corporate governance issues in joint venture enterprises between the council and private companies.

It was revealed that there was gross non-remittance of revenues to the council, unavailability of audited accounts, unclear commercial/profit-sharing structures and a lack of monitoring of the business interests by the council.

“The budget assessment team observed that there is serious over staffing.

“This has caused Harare City Council to compare unfavourably to regional cities in terms of the employee-resident ratio.

“Consequently, a significant portion of income is channelled to salaries and not service delivery.

“No effort has been shown in the budget to rationalise this.” – New Ziana/ Suburban Reporter.