South Medical Chitungwiza (Private) Limited

Report to Management
Year ended 30 September 2020

Trevor Mungwazi
Lead Partner
T:+263772726612
Email : Trevor.Mungwazi@zw.gt.com
Daniel Nyengerai
Engagement Manager
T:+263772176087
Email: Daniel.Nyengerai@zw.gt.com
 Private and Confidential

Audit and Assurance Services Audit and Assurance Services

South Medical Chitungwiza (Private) Limited
Hadzinanhanga Road Grant Thornton Grant Thornton
Chartered Accountants (Zimbabwe) Chartered Accountants (Zimbabwe)
Zengeza 4 Registered Public Auditors Registered Public Auditors
CHITUNGWIZA Camelsa Business Park 1 Clark Road
135 Enterprise Road, Highlands Suburbs
P. O. Box CY2619, Causeway P. O. Box 27
02 September 2021 HARARE BULAWAYO

T +263 (0) 4 442511-4 T +263 (0) 9 231431-5

Dear Sirs, F + 263 (0) 442514 F + 263 (0) 9 231435
E info@zw.gt.com E infobyo@zw.gt.com
www.grantthornton.co.zw www.grantthornton.co.zw

This report communicates to management our audit findings for the audit of the
financial statements of South Medical Chitungwiza (Private) Limited (hereinafter
referred to as “South Medical”) for the year ended 30 September 2020.
Audit scope and approach
Our audit scope and approach is designed principally to enable us to express an
opinion on the fairness of the information contained in the South Medical financial
statements.
The audit was conducted in accordance with International Standards on Auditing
(ISA).
We were granted access to all the required documents and information that was
necessary in order for us to complete our audit.
Independence
We are not aware of any relationships between South Medical and ourselves that
would impair the independence and objectivity of the engagement partner or the
audit team.
Fraud and illegal acts
The responsibility for the prevention of fraud and error rests with management
through the implementation and continued operation of adequate accounting and
internal control systems. We have not identified any fraud or illegal acts during the
audit.

Chartered Accountants
Member firm within Grant Thornton International Ltd
Grant Thornton is a limited liability partnership registered in Zimbabwe No: OC307742.
Registered office: Camelsa Business Park, 135 Enterprise Road, Highlands, Harare, Zimbabwe.
A list of members is available from our registered office.

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 Disagreements with management
During the course of our audit there were no disagreements with management.
All differences were resolved through discussion and dialogue.

Audit adjustments
All audit adjustments noted during the course of the audit were recorded and
considered by management while preparing the financial statements.

Yours faithfully,

Grant Thornton
Chartered Accountants (Zimbabwe)
Registered Public Auditors
HARARE

© 2021 Grant Thornton Zimbabwe | South Medical Chitungwiza (Private) Limited | 30 September 2020 | 3
 Contents
Section Page
1. Update on prior year audit findings 5
2. Current year audit findings 7
3. Conclusion 12

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 Section 1: Update on prior year audit findings

01. Update on prior year audit findings

02. Current year findings
03. Conclusion
Issues not yet addressed from the previous audit

Issue Management update

1. Policies and procedures manual not approved by the Board of • The run down of the policies and procedures manual was set to be done during a
Directors. workshop for directors last year but were hindered by the Covid-19 restrictions.

2. Creditors reconciliation statements not being performed on a • Management implemented cash on delivery for most of the hospital consumables, which
monthly basis reduced significantly, the need for frequency creditors reconciliations.

©2021 Grant Thornton International Ltd. All rights reserved. 6

 Section 2: Current year audit findings

01. Update on prior year audit findings

02. Current year audit findings
03. Conclusion
Accounting and Internal Control Issues

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Current year audit findings DRAFT
Accounting and internal control issues
1. Long outstanding payables

Observation Management response

a) We noted that as at balance sheet date, an amount of ZWL 1 372 267, which g) The hospital suffered a significant liquidity constrain due to the pandemic as
is equivalent to 53% of the hospital’s trade payables was in excess of 60 days medical aid societies could not perform remittances in time as people were
outstanding. working from home.
b) These suppliers provide services and products to the hospital.

Effect
c) Current credit facilities extended to the hospital may be withdrawn.
d) Termination of key services vital to the running of the hospital by suppliers.
e) Disputes and strained relationships with suppliers and as a result, the
hospital may lose out on potential discounts.

Recommendation
f) Management should negotiate payment plans with creditors which they are
able to adhere to, taking into consideration the possible threat of litigation.

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9
Current year audit findings DRAFT
Accounting and internal control issues
2. Creditors balance on age analysis not agreeing with amount on the trial balance.

Observations Management response

a) There is an unreconciled balance of ZW$3 637 between the creditors age e) The creditors reconciliation issue is an inherent system error discovered since
analysis and the trial balance. the implementation of the multi currency module. The system provider has now
b) The table below shows the details of the variance between the two records: resolved the error.

Balance
As per age analysis As per t rial balance Variance
ZW L ZW L ZW L

Invoice creditors 2 568 226 2 571863 3 637

Effect
c) Misstatement of the payables in the financial statements.

Recommendation
d) Management should ensure that the creditors age analysis is agreeing to the
trial balance at all times for completeness purposes.

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Current year audit findings

Accounting and Internal control issues

3. Purchase orders being done manually.
Observation Effects
a) From our review of the procurement system, we noted that South medical’s d) Fraud and error may go undetected.
purchase orders are done manually. e) Misstatement of financial statements.
b) Upon receipt of the goods only the invoice will be posted into the system,
and the purchase order is not posted. Recommendation
c) Below is an example of the manual purchase orders. f) The company should consider fully utilizing the Pastel accounting package,
and inquire more about the goods received and purchase orders module.
This will save time and reduce fraud and errors.

Management response
g) Plans are being set to implement a procurement module for pastel if funds
permit.

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 Section 3: Conclusion

01. Update on prior year audit findings

02. Current year findings
03. Conclusion
Conclusion

Conclusion
Management judgement and accounting estimates
 The areas where management has used judgement are given in accounting
policies to the financial statements.

Other services provided by the firm

 We have not provided other services to the organisation during the period
under review.

Subsequent events
 At the date of finalizing this report, we are not aware of any significant post
balance sheet events that require adjustment to the annual financial
statements.

Other matters
 There are no matters which warrant our communication to management and
the Board of Directors, such as material weaknesses and significant deficiencies
in internal control (including those that prevent or detect fraud), questions
regarding management integrity, and fraud involving management or
employees who have significant roles in internal control or other fraud that
results in material misstatements.

Conclusion
 We would like to express our appreciation to the management and staff of
South Medical Chitungwiza (Private) Limited for their invaluable co-operation
during the audit.

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Thank you

©2021 Grant Thornton International Ltd. All rights reserved.