The latest auditor general’s (AGs) report has exposed poor accounting procedures at the United Bulawayo Hospitals (UBH) where it emerged that the institution last carried out some evaluation exercise of its property in 2014.
The report was produced by former AG Mildred Chiri, who has since retired.
UBH has four in-house hospital facilities — Richard Morris Eye Unit, Lady Rodwell Maternity Hospital, Robbie Gibson, an infectious diseases hospital and the main hospital.
"Because of the significance of the matters described in the basis for disclaimer of opinion section of my report, I have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements," reads the AG's report.
On valuation of property and equipment, the AG said the hospital last carried out the exercise in 2014.
The report said this was in violation of the International Accounting Standard 16 Property, Plant and Equipment (IAS 16).
IAS 16 is an international financial reporting standard adopted by the International Accounting Standards Board (IASB).
Under the IAS reporting standards, revaluations shall be made regularity ‘to ensure that the carrying amount does not differ materially from that which would be determined using the fair values at the end of each reporting period.’
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“Given the economic changes that occurred from 2014 to the reporting date, it is likely that the carrying value of property, plant and equipment amounting to $976,5 million as at year end was materially and fundamentally different from that which would have been determined through a revaluation exercise in line with (IAS)16- “Property, Plant and Equipment” as well as IFRS 13-“Fair Value Measurement," reads the report.
The AG said she was not provided with a detailed fixed asset register.
"I was unable to quantify the fair value of property and equipment through alternative audit procedures as at the reporting date,” the report reads.
“As a result, I could not verify the completeness, accuracy, existence and valuation of the items of property, plant and equipment amounting to $976,51 million as at the reporting date, through alternative audit procedures."
The AG said progress on capital projects could not be measured because of lack of sufficient information.
The report noted that management were unable to provide the basis, inputs and methods which were used to determine the percentage completion per each project, as well as the related supporting documents.
"In addition, appropriate project control accounts and reconciliations were not being maintained in respect of each project,” reads the report.
“Accordingly, I was unable to satisfy myself on whether amounts recognised as work in progress as well as the completed projects amounting to $221.6 million and $86.7 million respectively, were not materially misstated.
"In addition, in the absence of detailed project general ledger control accounts, I was unable to verify whether the inflation adjusted amounts had been accurately restated in accordance with IAS 29- “Financial Reporting in Hyperinflationary Economies''.
The AG said retention liabilities for completed capital projects were also not measured and recognised in the financial statements for the year ended December 31, 2020.
The report said pharmacy inventory items received during the year were not being accurately and timeously captured.
"In addition, some inventory items received were being processed as stock adjustments resulting in these items being excluded by the Trimed system in the determination of average cost,” the report said.
“Further, donated inventory were being recognised at nil values during the year and this had the effect of reducing the average unit cost.
"Therefore, these weaknesses resulted in the distortion of the Pharmacy inventory unit values.”
“Therefore, it was impractical for me to verify the accuracy as well as the valuation of inventory amounting to $19.9 million through alternative audit procedures."
In the report for the year ended December 31, 2020, it was revealed that UBH’s books were not in order with authorities also failing to provide information during the probe.
UBH is a principal referral centre which provides high specialist health care..
