An Analysis of Governance and Fraud Risk Management Processes in Zimbabwe's Local Authorities

Abstract

This paper seeks to analyse the level of governance and fraud risk management processes in Zimbabwe's local authorities. The study has been motivated by reports of poor service delivery, weak controls, noncompliance to laws and regulations, and high incidences of fraud and corruption at all levels of Zimbabwe's public sector. This scenario is unwarranted, particularly from a sector that is supposed to be run under high-governance corporate structures. Corporate governance and service delivery are supposed to be the order of good business in the public sector. This paper is premised on the stakeholder theory. The research used a qualitative methodology using a descriptive research design. The Auditor–General's financial reports period 2012 to 2019 on the Local authorities and other publications were utilised as primary documents for data analysis. The study noted that fraud is on the high side because of weak corporate governance and fraud risk in this sector. There is a lack of honesty, ethics and professionalism from the leadership. The protection and enhancement of the best interests of the sector are not at their best. Internal controls relating to financial and performance reporting, adherence to applicable laws and regulations, and other supervision responsibilities are not adequately being carried out. It is hereby concluded that fraud risk in local authorities is high because there is no effective corporate governance in this sector. For the sustenance and survival of this sector, this study recommends the implementation of effective governance that is based on good ethics and professionalism and that effective forensic auditing is practised to ensure all the fraud culprits are punished.