$23m Air Zimbabwe scam exposed

Air Zimbabwe
Air Zimbabwe

THE Auditor-General has exposed a scam in which Air Zimbabwe received $23 million from the Traffic and Legislation Fund without approval from Treasury between 2012 and 2013.

In a report presented to Parliament on Wednesday, the Public Accounts Committee chairperson, Mrs Paurina Mpariwa, said the then Permanent Secretary in the Ministry of Transport and Infrastructural Development, Mr Munesu Munodawafa, authorised the disbursements without approval from Treasury.

“Audit observed that for the second year-running, the fund made some payments to Air Zimbabwe service providers without obtaining prior Treasury authority.

“Payments were then treated as long-term loans, although no interest is being charged, contrary to provisions of the fund’s constitution.

“The accumulated payments as at December 31, 2013 amounted to $22.9 million (2012:$19.9 million).

“The loan agreements had not been signed by Air Zimbabwe and no repayments had been received,” she said.

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Mrs Mpariwa said during 2014, the fund further advanced to Air Zimbabwe $7.5 million as a loan to repay its operational expenses.

“The Audit further noted that there were no explanatory notes submitted with accounts on the long outstanding loans to Air Zimbabwe, which is required by best practice.

“There is a risk that the fund may fail to achieve its objectives if its revenue is diverted to other entities, which is in violation of the Constitution of the fund,” she said.

Mrs Mpariwa said the committee further queried whether retention funds were justified if the fund had such excess funds to loan out to other entities.

“In the absence of explanatory notes on items, the integrity of the financial statements may be compromised. The Permanent Secretary admitted that the ministry erred in diverting fund monies to Air Zimbabwe without Treasury approval and offered an apology for its action.

“He confirmed that loan documents for all the amounts observed were in place. The Committee questioned the possibility of Air Zimbabwe paying back the loans, considering its current dire state,” said the committee’s chairperson.

In this light, Mrs Mpariwa said her committee recommends that the Ministry of Transport and Infrastructural Development approach Treasury and work out the modalities for takeover of the debt for Air Zimbabwe by Treasury by September 30, 2017.

“Going forward the Ministry should desist from diverting fund revenue without Treasury approval.

“The Treasury should assess and advise by December 31, 2017 whether there is a need for the ministry to still retain the current percentage of the Fund revenue in view of the amounts, hovering around $23 million, that have been extended to Air Zimbabwe over a period of time,” recommended the committee.-Chronicle