Recommendation. No Key Area Finding Risk(H-hi gh S-signific ant M-moder ate L- low risk) 1. Internal controls and financial procedures.

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1 No Key Area Finding Risk(H-hi gh S-signific ant M-moder ate L- low risk). Internal controls and financial procedures. There is adequate adherence to internal controls and financial procedures in relation to timely financial reporting.however, We observed that although there was a computerised accounting package the organisation was not fully and adequately utilising the accounting package. At the time of the assessment, 203 transactions had not yet been updated on the system at both the head office and regional offices. This is partly because of the inadequate staffing levels in the finance and accounts unit.. We observed that there was inadequate staff awareness of the content of the documents on internal controls and financial procedures at district level Recommendation H The organisation must immediately capture all transactions in the accounting package and stop running a parallel H manual accounting system. Accounting transactions must be recorded and reconciled on a regular basis. All postings are now are to date, and bank reconciliations are prepared on a regular basis ZNFU should demonstrate that all staff are aware and knowledgeable of the documented internal controls for increased accountability. Failure by staff to follow the staff policies can be a basis for disciplinary action where necessary. Prio rity We have asked all staff to read through all the ZNFU documents that relate to the guidelines like the Financial Manual and staff blue print.

2 2. Funds flow at all levels, including bank and cash flow management. To the fact that the Accounting records in pastel accounting package were not up to date, bank reconciliations were not prepared and signed on a monthly basis in the Districts and at Head Office. H ZNFU must prepare monthly bank reconciliations in line with the Financial Management and Procurement Guidelines for effective monitoring of monthly cash position and reduce the risk of failure to detect fraud, mispostings, and errors. The cash book postings must be captured by the junior accountants, reconciliations prepared by the senior accountants, checked by the Finance and Administration Manager (FAM) and final sign off by the ED. This will free up more time for the FM to perform and manage other financial functions. Reconciliations in excel must cease to reduce risk of manipulation of reports and increase efficiency as there will be no duplication of work The bank reconciliations has been prepared and management is following the recommended procedures on the signing and preparation arrangement

3 We were not able to assess the handling of advances as the records were not updated in pastel. 3. Procurement The procurement procedures are well documented. And sufficient S Advances must be monitored on a regular basis through monthly reconciliations Advances are regularly monitored and deducted accordingly. S As a matter of practice, procurement policies and procedures must be adhered to. Procurement practises are adhered to and Tender committee sits regularly to consider procurements Asset While the fixed asset is M ZNFU must update its 3 management fully updated at HQ, we fixed asset register, label and control however observed all new ZNFU assets with system at all inaccuracies in fixed unique identification levels register at districts in terms of labelled because some markings, and re-label all existing ZNFU assets with the assets were not unique identification labelled We observed markings where the inaccuracies in the fixed marking have faded or asset registers that are maintained at district level and that the organisation did not adequately label its assets that are in the district offices. This increased the risk of pilferage, misuse, and loss. Examples included unlabelled tables in Kabwe, faded labels in Kabwe and Ndola, damaged equipment in Mpongwe indicated on register to be in good condition, lost item (laptop) but shown to exist Kabwe have been removed and ensure that location of assets and condition of assets are regularly updated. This is required to reduce risk of loss; assist in monitoring of movement of assets and identification of ZNFU assets. The scale up of funding will include the purchase of new assets that need to be safeguarded. The Fixed asset is registered is up to date and compared with the

4 6. 7. Institutional capacity general management set-up and staff capacity in terms of financial management including procurement. Adequate documentation of human resource policies. However, there was some come lack of comprehension by some staff Pastel postings on a regular basis. M ZNFU to ensure are oriented at the time of recruitment to staff policies and procedures New staff are oriented adequately and provided with all documatention that relates to human resource policies. Older staff have also been asked to read through the documentation again. 3 The staffing levels in Head Office Finance is inadequate to carry out regular accounting work and at the same time monitor district expenditure. The Finance department of 4 staff has the responsibility to perform financial monitoring for plus 72 district offices (including the new districts should offices be set up). This is simply not practical. S ZNFU should recruitment regional review its organisation structure and introduce the position of Regional Accountant to be based at each regional office. This is needed to cope with the increased funding, activities and therefore work load And enhance financial monitoring and accountability throughout the ZNFU. Regional accountants have been recruited 3 o There was an exhibition of lack of appreciation and utilization of the pastel accounting software at district level. S ZNFU must ensure that financial reporting and control is tracked on a monthly basis through the accounting system ZNFU should also ensure that there is a clear agreed time frame with its service provider for the provision 2

5 Regional and district offices did not have the capacity to utilise Pastel Evolution. They were still producing reports outside the system. S of software licences before they expire. ZNFU should also have a system of ensuring that hardware is replaced or repaired without affecting operations. This will help to achieve greater efficiency and value for money Financial reporting is done on a monthly basis. Software is managed and renewed before it expires. ZNFU should review its organisation structure and introduce the position of Regional Accountant to be based at each regional office. This is needed to cope with the increased funding, activities and therefore work load And enhance financial monitoring and accountability throughout the ZNFU. Done 3 8. Fiduciary and other risks involved in channelling funds through the ZNFU/provincial and district systems and routines. Suggest effective risk-mitigating measures. We observed that Mpongwe District was receiving funds through cash disbursements. H Cash disbursements increase the risk of loss and fraud. All funds to Districts must be through District bank accounts for ease of accountability, audit trail and mitigation of risk. Employment of Regional Accountants to ensure accountability of funds disbursed Done

6 8 9. Proposed ZNFU suggestions on way of channelling the funds to the organisation, follow-up, reporting, auditing, and reporting. Funds to be channelled to ZNFU HQ bi annually for onward transmission to Regions, and Districts, monthly upon retirements by Regions and Districts of previous month s monies. ZNFU should prepare quarterly financial and narrative reports, and personnel from HQ internal audit or external auditors can be contracted for quarterly monitoring. The internal Auditor interviews are to be conducted on th July 204