GREAT ZIMBAWE UNIVERSITY

MUNHUMUTAPA SCHOOL OF COMMERCE

DEPARTMENT OF ACCOUNTING AND INFORMATION SYSTEMS

MODULE: Corporate Governance (AC 410) PART 4.1 SEMESTER 1

2020

ASSIGNMENTS

Group Assignment

Case study

The following is an extract from Auditor report for National Social Security Authority

The National Social Security Authority is a corporate body that was established in terms of the
National Social Security Authority Act, [Chapter 17:04], to establish social security schemes for
the provision of benefits to contributors of the schemes. It has the mandate to administer the
pension and other benefits scheme, the accident prevention and workers compensation scheme.
These financial statements are in respect of the authority as a whole (consolidation of the two
schemes and the subsidiaries) and separate financial statements have been prepared for the
individual schemes.

Investment with MetBank

Investments with Metbank Finding NSSA invested Treasury Bills amounting to $20 000 000
with Metbank during the year despite the fact that the Authority’s Risk and Management
Department had recommended against this investment. The Bank had a nil trading limit due to
the fact that its risk of default was high and was deemed to be financially weak. NSSA further
placed $62, 25 million worth of Treasury Bills with Metbank and the agreement was that NSSA
would advise Metbank on the utilization of these Treasury Bills. The authorization to instruct
Metbank was supposed to be approved by the Board. However, an officer instructed Metbank to
utilize the Treasury Bills with a face value of $37.35 million without authorization from the
Board.

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Board investment expert finding

The Authority obtained approval from the Parent Ministry on November 15, 2015 to appoint
Investment expert to the Investments Committee for a period of one (1) year. The Authority
appointed an expert who resided in South Africa on November 30, 2015,for a three-year period
at a fixed quarterly fee of $2 500. In addition, the Authority incurred additional costs in respect
of airfare costs and hotel expenses for the expert to attend meetings. As a result the Authority
incurred an excess of $20 000 on the expert fees and expenses. NSSA Act [Chapter 17:04]
section 13 (4) (b) provides that the Board may appoint as members of any committee, on such
terms and conditions as the Board may fix, persons who are not members. NSSA went on to
appoint an investment expert to the Investment Committee who was not ordinarily resident in
Zimbabwe and this is contrary to the requirements of section 8 of the NSSA Act [Chapter 17:04].
There was no evidence of clearance or waver from relevant authorities.

The audit also established that the Board Chairman was also the Chairperson of the Investment
and Procurement subcommittee.

Recruitment Finding

The Authority shortlisted four (4) candidates for the post of ICT and Digital Strategy Executive.
Three of these including the incumbent did not apply for the post. The post had been advertised
and interested candidates were required to respond by sending their applications and curriculum
vitae to a given email address. A total of 171 candidates responded to this job interview. No
explanations were provided as to why the Authority had shortlisted some candidates who had not
applied for the job. In addition, the Authority made appointments to the positions of Loss
Control Officer and Accountant Pension and other Benefits Scheme which were not on the
organogram.

Questions

1. Examine the governance issues that have been raised in the extract. In your answer you
should suggest and explain solutions to the governance challenges. (25)
2. There has been an explosion of high profile scandals in Zimbabwe’s state owned
enterprises and departments. Examine the possible causes of these scandals (25)

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Due Date 30/11/2020

Assignment 2

Shopfy limited is planning is a newly formed company that wants to uphold good corporate
governance. The company approaches you for information that will help it achieve its objectives.

Assist the management of the company in the following areas of corporate governance:

(a) The role of internal audit in risk management (10)

(b) Relevance of the corporate governance code to various stakeholders of the company (10)
(c) The significance of non-executive directors (10)
(d) Differences between management and corporate governance (10)
(e) The responsibilities of the risk management committee (10)

Due Date 15/12/2020