HARARE - Government is enacting a law to determine the governance and management of State enterprises, including board and chief executives’ appointments, Information minister Jonathan Moyo said.
This comes on the back of gross mismanagement and misgovernance of parastatals with their management earning hefty salaries as the institutions incurred massive losses.
Moyo said so far government had a policy framework and is moving to enact the law.
“This framework relates to the appointments of boards, conduct of boards, relationships between boards and ministries and more critically the appointment of CEOs in the terms and conditions which are consistent with good corporate governance,” Moyo told an Accountants of Zimbabwe /Doing Business Report forum yesterday.
The Media minister said the legislative piece was a way of government firing warning shots to non-compliant chief executives.
“It turns out that the response so far by the affected community of these officials has been negative and even contemptuous because there are no legal consequences for deviating from the framework,” Moyo said.
“It is therefore necessary that we go a step further and legislate this framework so that there are clear legal parameters and clear legal penalties in the event of non-compliance,” he said.
Recently, government imposed a $6 000 cap for top earners in State enterprises and local authorities following exposes of incommensurate salaries.
“It is something we need to do, not only to inspire confidence in the public but also send a clear message to the parastatals, State enterprises and local authorities that this isn’t a joke, it’s serious. Some of them are taking it as a joke but it’s a very serious legal matter,” said Moyo.
This comes as analysts have called for the Public Accountants and Auditors Board (Paab) to be allowed to publish audits on parastatals.
Paab — a government body mandated to audit all State enterprises — is not allowed to publicise its findings on parastatals but submit them to parent ministries.
Analysts argue that parastatals are public institutions funded by taxpayers’ money for the most part and as such, must disclose the findings.
“I believe that it’s in the law that public institutions must publicise their findings. Former Reserve Bank governor Gideon Gono once made a complaint about Paab being handicapped as it was not allowed to publish its findings,” said economist John Robertson.
“Government stops Paab from making its findings public because it is embarrassed to let the public find out what really happens with their money,” he said.
Isiss Mwale, another economist, said government should make a provision for parastatals’ audits to be published to ensure transparency.
“There is an international standard that prevents Paab from making their findings public, but seeing that there has been a shocking salary revelation from public institutions I think government should put in place a waiver for Paab to publish their findings,” Mwale said.
Paab chairperson Wesley Sibanda told businessdaily that the only way to empower the auditors to make their findings public was legislative approval from government.
“Our hands are tied, auditors should keep information confidential. This is an international stipulation for all auditors,” he said.
“Paab only reports its findings to appropriate parastatal ministries at whose discretion to disclose the findings entirely lie. It is up to the parent ministry to publish our findings, not us. We are just auditors who examine the books,” said Sibanda.
Zimbabwe has recently been rocked by salaries and corruption scandals in parastatals.
Market observers contend that the crisis could have been nipped in the bud if parastatal audits were published to expose the malpractices.
Another obstacle to having the audits publicised is that government failed to adopt and implement the International Public Sector Accounting Standards (Ipsas).
The standards are set for use by public sector entities in preparation of financial statements and are based on the International Financial Reporting Standards (IFRS).
The system requires a public audit on government officials and public sector accounts.