Gold and mining funds looted

THE Ministry of Mines and Mining Development has started internal investigations after auditors exposed fraud and mismanagement of public monies administered through the Special Gold Unit Fund and the Mines and Mining Development Fund.

The Mines and Mining Development Fund is among cash cows at the ministry after its revenue climbed by 94 percent to US$6,7 million in 2012, from US$3,6 million the previous year. It appears the fund has become the target of abuse by senior civil servants, who are hiding or manipulating crucial data to evade detection.

Payments have been made for goods or services which have not been delivered while accounting records have been destroyed and doctored to conceal fraudulent transactions, a report by the Auditor-General, Mildren Chiri, on the ministry’s operations covering 2011 and 2013, has revealed. The audit exposed higher cases of fraud at the Ministry of Mines and Mining Development than most line ministries, which could be an indication of the gravity of abuse of mineral resources in the country.

In many cases, the ministry was forced to pay for vehicle repairs which never took place. The Financial Gazette has obtained the report, which reveals several cases of abuse, including the diversion of US$3,3 million from the Mines and Mining Development Fund in violation of agreed procedures. About US$1,2 million of the US$3,3 million was expended on domestic and foreign travel, a common trend in all State departments, where hundreds of fruitless global trips have been undertaken to line the pockets of chefs and other senior civil servants.

Those in strategic public offices have amassed wealth, amid reports of big spending on real estate both at home and abroad. The Mines and Mining Development Fund was also plundered of US$51 400 through underhand transactions. Staff at the fund worked with officials at the State-controlled printing firm, Printflow, to cream off thousands of dollars during the review period, and attempted to destroy accounting records.

The Special Gold Unit Fund account, established to mobilise and manage financial and human resources to curb gold leakages, was also hit by fraudsters, according to the report, losing US$26 876 incurred towards vehicle maintenance. Police are currently investigating the transactions.

“All requests to incur expenditure for the fund were supposed to be initiated and approved by the Special Gold Unit Administrative Department,” the official report said.

“It was observed that requests for stationery consumables for the fund amounting to US$23 026 were initiated by the administration officer for the Ministry of Mines without the approval of the Special Gold Unit Department. Confirmation with the Special Gold Unit revealed that no goods were received.

“The cash register for the Special Gold Unit Fund was stolen and the theft was discovered on March 13, 2012. No action was taken until November 2012 … Cash withdrawals were done contrary to the provisions of the fund’s constitution … an amount totalling US$34 252 could not be validated as having been used for intended purposes as payment vouchers relating to this expenditure were suspected to have been fraudulently processed,” said the report.

The Ministry said it had engaged the Criminal Investigations Department (CID) to probe several of the cases exposed by the auditor. No arrests had been made by October 31, 2014. “The matter is receiving serious attention and CID Serious Fraud Squad has been requested to investigate this issue,” said the Ministry of Mines and Mining Development, in reference to the Special Gold Unit fraud.

“The missing cash register has been reported to the police and a board of inquiry will be set up to look into the circumstances surrounding its disappearance.”

The report also says:
-US$42 162 requested for travel and allowances was not acquitted.
-Fund failed to produce records for US$11 973 fuel purchases.
-US$20 611 was used to purchase computers but no receipts or delivery notes were produced.
-US$8 000 could have been abused during vehicle repairs — vouchers pertaining to the transaction went missing.
-A review of the records revealed that US$463 379 in various expenditure was not supported by vouchers and other supporting documents.
-Due to weaknesses in the internal control system … the ministry lost US$128 795 through fraud at its Bulawayo office.

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