By Romio Takundwa
The Zimbabwe Consolidated Diamond Company (ZCDC) has failed to account for 352 583.11 carats of diamonds worth about US$146.3 million which it had in stock.
This was revealed by Auditor General, Mildred Chiri in her 2019 report on state enterprises.
Chiri doubted the company’s ability to continue operating due to losses while questioning some of the company’s investments.
“There was no evidence of a documented formal process of reconciling physical stock counted to theoretical stock. For instance, the following anomalies were noted in respect of diamond stocks which then necessitated post year-end adjustments to the financial statements which had been presented for audit.
“In 2019, 297 660.41 carats of diamond stock held at MMCZ (Minerals Marketing Corporation of Zimbabwe) was not counted at the time of the stock count. These parcels were packed for customers and held at MMCZ. However, at year-end, during the stock count, these stocks were not included in closing inventories; and in 2018, 41 699.85 carats of diamond stocks held at MMCZ were excluded from the stock count. It was assumed at the time that these stocks had been sold to customers.
“An additional 13 222.85 carats were excluded from the final stock sheet in error,” read the report
The report by Chiri also expressed concerns over the fact that “possible pilferage of inventories may occur and go undetected.”
“I was not able to verify the valuation (recoverability) of amounts owed by related parties with a balance of $304 258 953 on the company’s statement of financial position. Some of the amounts are owed by companies that have since closed down whilst ZMDC have not acknowledged the amount due. Management failed to provide persuasive audit evidence on how and when these amounts would be recovered. Consequently, I was unable to determine whether any adjustments to the above stated amounts were necessary,” reads the report.
“I was not able to verify the valuation (recoverability) of amounts owed by related parties with a balance of $24 347 454 on the Company’s statement of financial position. The amounts are owed by companies that have since closed down. Management have failed to provide us with persuasive audit evidence on how and when these amounts would be recovered.”
Diamond revenue has been a contentious issue with the late former president Robert Mugabe once claiming that US$15 billion revenue had been stolen. Although the figure was largely doubted, it was seen as confirmation that indeed there was looting in the diamond mining sector.