Audit flashes red lights at HCC

THE Harare City Council (HCC) could have been swindled of thousands of dollars after a forensic audit revealed that some of its point-of-sale (POS) machines were not linked to its bank accounts.

HCC introduced POS machines in 2016 to make life easier for the transacting residents.
With the biting cash shortages, Zimbabweans now prefer to transact electronically hence the upsurge in the usage of POS machines.

But a forensic audit at HCC has disclosed that 19 POS machines distributed across council’s revenue-collecting points are not linked to any of its bank accounts.

“A 100 percent stock count on the 43 district offices and other council revenue collecting centres revealed a total of 188 POS machines. There were 19 POS machines that were located at district offices but could not be found on the bank list.
“It was also noted that there was a …POS ID which had dual identification codes hence the risk was that it was open for abuse and manipulation,” reads part of the audit.
The audit checked on all its bankers using the client’s duplicate receipts and merchant copies to trace sampled transactions for POS machines ID to debtors account, bank account and cash book but the procedure did not yield the intended results as the devices were not linked to their respective cash books.

“It was noted that some of the banks did not have corresponding BIQ cash books, hence audit could not extract the BIQ cash books of such banks,” the audit revealed.
Because of the lack of BIQ cashbooks, transactions made from such bank accounts were being posted into cashbooks in use on the day.

Audit manager Archbald Nyamurova said some of the banks were delivering the POS machines directly to the district offices without going through the finance department.
And because of this, the audit could not get a record of such machines at the banks’ head offices or at district offices except for Glen View and Budiriro.

He added that July 2017 reconciliations for one of the banks had not yet been checked because of challenges in the reconciliation process. 

“There was no integration of the receipting process. 
“The receipting process is a separate transaction to the POS machines transaction. 

“This means if a cashier swipes an amount say $100 from an … account and manually receipts the same in the BIQ in a … cash book; there is no cross reference between the two transactions.” 
While Harare mayor Herbert Gomba could not be reached for comment at the time of going to print yesterday, last year, a similar audit into POS machines showed that there was a mismatch in the city’s POS machine registers and their physical count.

According to minutes of an audit committee that met at the time, the use of POS machines, online and mobile banking and RTGS increased the city’s risk of fraud.

“The POS devices are a particular area of vulnerability to HCC because it does not appear as if the finance department was in full control of their deployment across council premises.

“Findings into the audit were that there was a mismatch between HCC register of POS devices, their physical count and the banks’ register of POS devices deployed. 
“The city’s POS devices were not integrated with the BIQ system,” read part of the minutes from the previous audit.

    Comments (5)

    Given this exposure what is the way forward? All payments made through unregistered POS devices definitely went into individuals' pockets "a Cartel of some sort". Production of the receipts of payment made by the respectful ratepayers is the saviour of many.

    Mukanya - 27 March 2019

    We are concerned with the$57 for clamping this is very ridiculous have seen a where City Council enforcement clamping cars saying failure to display a valid prepaid parking disc. when the City Parking agent is nowhere to be found. they are catching the clients unaware when it appears as if they let the city parking agent disappear and they do a random clamping to collect money from innocent drivers

    Stave Chiponda - 27 March 2019

    The Funny thing is the HCC has an Audit Department that has been paid for doing nothing. A Finance Department to set systems but nothing adhered to. Yes there is a Risk of Fraud but the biggest risk is failure to put a system that manages the POS. Failure is simple the MANAGEMENT

    bernard chamboko - 28 March 2019

    I bet you the POS machines are linked to the so called chefs in HCC. The audit should be able to trace where the money was going.

    yohwe - 28 March 2019

    Any official comment from the powers that be at HCC regarding this financial scam?

    Mukanya - 29 March 2019

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