ZETDC Fails to Account Millions In Revenue!

Harare | The transmission of energy from power plants and its retail to end consumers is the responsibility of ZETDC, a subsidiary of the Zimbabwe Energy Supply Authority (Zesa) Holdings.

In her report on State-Owned Parastatals for the year ended December 31, 2022, acting Auditor-General (AG) Rheah Kujinga made the following discovery: the ZETDC’s client payments system was not interfaced with banks, resulting in payments totaling ZW$793.4 million being processed but not being credited to the corresponding customer accounts.

In response, the business said that client direct deposits—which lack helpful supporting customer data—were the reason for the unallocated payments.

The company has been running on the verge of bankruptcy since its current obligations are more than its current assets, a persistent problem that former AG Mildred Chiri noted in her earlier report.

“For the year ended December 31, 2021, the Company incurred an operating loss before tax of ZW$816.02 million (2020: ZW$25.9 billion).” As of December 31, 2021, the Company’s current liabilities were ZW$24.5 billion (2020: ZW$47.5 billion) more than its current assets, according to the report.

“The Company missed its non-rescheduled international loan repayment obligations.

“These circumstances point to the presence of material uncertainty that could seriously impair the Company’s ability to operate as a going concern.”

Additionally, ZETDC was experiencing transmission losses throughout the review period that ranged from 1% to 5% and were higher than the 14% cap on the number of units of power sold compared to units of energy bought.

However, there was insufficient data to justify an inquiry into these discrepancies.

Further anomalies have been discovered. The firm processed gasoline and electricity allowances to workers in violation of its human resources policy, which states that each employee is only entitled to one of these perks, not both, since it neglected to verify payslips and payroll summaries.

Additionally, Kujinga reported that as of December 31, 2021, the unpaid sum due to the ZEDTC for failing to submit the rural electrification charge to the Rural Electrification Fund (REF) was ZW$4.3 billion (2020: ZW$1.8 billion).

Because there are still not enough operating cars, the corporation is continuing to violate company rules by neglecting to collect metre readings. According to the article, “The Company has secured funding through a bank loan facility for the installation of smart metres to the large users of electricity and prepaid metres to the remaining approximately 103 000 clients.”

“After the projects are finished, every client will have a smart or prepaid metre by 2022, thus metre reading problems will be a thing of the past. The project is not yet finished.

By the end of June 2022, the metres are anticipated, and the installations should be finished by the end of the fourth quarter of 2022.

Significant operational limitations have also affected the ZETDC, resulting in a lack of cars for employees to efficiently do their jobs.

The corporation had an outdated fleet of cars that were breaking down all the time. There weren’t enough operable cars available as a consequence for employees to carry out their responsibilities. For example, there were metres that were not read for almost a year.

Since the customers are paid using estimations, this was against business policy, which stipulates that metre readings must be taken every three months, according to the study.

Due to the company’s disregard for international accounting norms, there is a greater chance that financial statements may be misrepresented.

According to the report, “Directors performed the valuation of the property, plant, and equipment as of December 31, 2021.” After determining the valuations of the property, plant, and equipment in US dollars, the auction rate as of December 31, 2021 was used to convert the values to ZIM dollars.

The converted Zimdollar values were not in compliance with IFRS 13 “Fair Value Measurement” because they might not reflect the assumptions that market participants would apply in valuing similar items of property, plant, and equipment in Zimdollar, even though the determined United States dollar values reflected the fair value of the property, plant, and equipment in United States dollar.