Gwanda Municipality in payroll dilemma

Published: 31 July 2025

Gwanda Municipality is facing serious questions over its financial management after the Auditor-General's 2024 report revealed significant discrepancies in payroll processing and financial reporting.

The report highlights that the municipality processed a staggering ZWL$3.74 billion outside its official payroll system, a figure vastly inconsistent with the mere ZWL$8.21 million reflected in its financial statements. This glaring mismatch raised doubts about the accuracy and reliability of the reported payroll expenses.

According to the Auditor-General, the municipality experienced system challenges that resulted in payroll processing occurring outside the official platform. The payroll summaries showed amounts totaling ZWL$3.75 billion, which did not reconcile with the financial statement figures.

"The municipality experienced system challenges, resulting in ZWL$3.74 billion being processed outside payroll. Consequently, the payroll summaries had an amount of ZWL$3.75 billion which did not agree with the financial statement amount of ZWL$8.21 million," the report stated.

Furthermore, the report noted that no reconciliations were undertaken to align the payroll summaries with ledger records, leaving the accuracy of payroll expenses in question. The Auditor-General expressed an inability to verify the reported payroll costs.

Municipal management attributed the anomaly to technical issues within their existing systems and assured that a migration to a new enterprise resource planning (ERP) system would resolve these challenges.

In addition to payroll concerns, the audit found that three municipal vehicles were not registered under the municipality's name and lacked proper logbooks for verification, exposing the council to risks of misappropriation or potential legal disputes. The Auditor-General urged the municipality to expedite registration of these assets.

The report also revealed that the council failed to comply with International Accounting Standard (IAS) 29, which governs financial reporting in hyperinflationary economies. The municipality applied incorrect conversion factors and improperly restated non-monetary assets using yearly averages rather than acquisition dates. The Auditor-General called for strict adherence to IAS 29 in future financial reporting.

An unresolved variance of ZWL$2.5 million was also identified between receivables reported at ZWL$20.18 million and aged analysis records totaling ZWL$17.67 million, further raising concerns about the reliability of financial data.

"I could not satisfy myself on the accuracy of receivables reported on the financial statements," the Auditor-General's report said, recommending that monthly reconciliations be carried out to ensure data integrity.

These findings paint a concerning picture of Gwanda Municipality's financial controls and highlight the urgent need for corrective measures to restore confidence and accountability in the local authority's management of public resources.
- Southern Eye

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