Harare City Council Fails to Account for ZiG691 Billion in Salary Payments, Auditor-General Finds

The Auditor-General says Harare City Council failed to provide payroll records supporting ZiG691.29 billion in employee costs, resulting in adverse audit opinions.

By Southerton Business Times Reporter | HARARE

The Harare City Council (HCC) failed to provide supporting payroll records for ZiG691.29 billion in employee salary payments over two financial years, prompting the Auditor-General to issue adverse audit opinions on the municipality's 2022 and 2023 financial statements. The findings are contained in the Auditor-General's 2025 Report on Local Authorities, tabled in Parliament last week by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube.

Auditor-General Vimbai Chikwenhere said the local authority could not produce payroll documentation to support ZiG53.48 billion in employment costs recorded in 2022.

"The council recognised employment costs amounting to ZiG53.48 billion which were not supported by underlying payroll records," Chikwenhere said in the report.

"I was unable to obtain sufficient and appropriate audit evidence to confirm the accuracy and completeness of employee costs and employee obligations recognised in the financial statements."

The audit further found that Harare City Council failed to provide adequate supporting documentation for an additional ZiG637.81 billion in employee costs recorded in 2023.

As a result, the Auditor-General said she could not verify the accuracy or completeness of employee-related expenditure and obligations reported in the council's financial statements. The shortcomings resulted in adverse audit opinions for both financial years, the most severe opinion an auditor can issue. An adverse opinion indicates that financial statements contain material misstatements and do not fairly present an institution's financial position in accordance with applicable accounting standards.

Chikwenhere said the council's failure to maintain complete accounting records contravened provisions of the Urban Councils Act, which requires local authorities to keep proper books of account and supporting financial records.

In its response to the audit findings, Harare City Council acknowledged the deficiencies and attributed them to limitations in integrating payroll systems, reliance on manual payroll reconciliation processes and challenges in calculating employee obligations. However, the Auditor-General maintained that the explanations did not resolve the absence of sufficient audit evidence required to verify the reported expenditure.

The report also highlights persistent weaknesses in Harare City Council's financial management. According to Chikwenhere, the local authority had not addressed 23 of the 25 audit findings raised in the previous audit cycle. Outstanding issues include:

• Failure to revalue council assets.

• Lack of supporting documentation for revenue and accounts payable.

• Failure to properly account for foreign exchange gains and losses.

• Weaknesses in financial reporting and record management.

Public finance experts say recurring adverse audit findings can undermine public confidence in local authorities and affect service delivery planning, budgeting and accountability. The latest report adds to longstanding concerns over governance, financial controls and record-keeping within Zimbabwe's largest local authority, which has faced repeated criticism over its financial management in successive Auditor-General's reports.

Harare City Council audit