STATE-OWNED mobile phone operator, NetOne, operated 35 banks accounts with 13 different banks, making it difficult to track transactions and increasing the risk of fraud, a forensic investigation final report into the government owned company has revealed.
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Last April, Auditor General Mildred Chiri, appointed PricewaterhouseCoopers (PwC) to conduct an audit of NetOne following the unearthing of massive irregularities at the parastatal.
Company management, including the chief executive Reward Kangai, have since been suspended to pave way for investigations.
“Our review showed that NetOne maintained 35 bank accounts with 13 different banks – a number in excess of the normal banking practice,” the audit report says.
“This increases the risk of fraud as it may be difficult to efficiently keep track of transactions in the different accounts. Furthermore, this exposes NetOne to unnecessarily high bank charges,” says the report.
The 130-page document also reveals how both management and staff took advantage of weak control systems to defraud the company.
“Staff negligently attached incorrect supporting documents to payment documents,” the report noted.
“Failure by management to ensure that airtime dealers acknowledge receipt of airtime distributed to them created opportunities for abuse by either staff or the dealers potentially resulting in revenue loss.
“We traced all Ok Zimbabwe and TM Supermarkets who are the only consignment dealers to NetOne delivery notes.
“We noted that there was no formal procedure for dealers to acknowledge receipt of consignment stock. Dealers did not sign delivery notes to acknowledge receipt of stock.”
PwC said key principles of best practice guidance were not in place and it is recommended that the current level of compliance is reviewed.
“Management during the period covered by the investigation appear to have ignored the principles of corporate governance applicable to an organisation of this nature.
“The tone at the top from senior management was less corporate; many major business decisions were made on an informal basis and without reference to the board.
“In addition the duty of care regarding public funds appears to have been ignored with expenditure on IT systems and network infrastructure that were in some case uneconomic and/or not fit for purpose.”
In its recommendations, PwC says that NetOne should have an approved and up-to-date procurement policy and procedures manual should be put in place.
“Engagement of suppliers should include the use of valid contracts to ensure NetOne’s interests are protected. NetOne should ensure that rental payments are in accordance with the lease agreement payment terms.
“NetOne should abide by the by-laws of local authorities so as to avoid incurring unnecessary penalties and NetOne should not advance loans to its contractors,” says the report.
The NetOne board is reported to have ordered the suspended directors to either resign or risk being fired.
The other suspended senior managers include Memory Mandiya-Ndoro (executive public relations and special projects), Prosper Muvengwa (executive retail and sales), Lindon Nkomo (legal) and Rafael Mushanawani (chief information officer).-Newzimbabwe
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