nmb mpos machines

Harare Looses Millions to 19 Fake POS Machines

Harare City Council may have been swindled off millions of dollars as rogue employees have introduced unregistered Point Of Sale (POS) machines, collecting revenues which were never submitted to the city, TechnoMag has learnt

During a recently undertaken audit, it was brought to light that a large number of the point-of-sale machines were not linked to the council’s bank accounts but these were still collecting revenue, which in turn were going to some unnamed banks.

As the country struggles from acute cash shortages,The City Council in 2016 introduced POS machines as a way of helping the residents and boosting their revenue.The use of digital money is on the ascendancy as most residents now prefer to transact electronically.

According to the forensic audit,19 POS machines that were distributed to various revenue collection points are not linked to its bank accounts.This anomaly means the council might have been swindled of millions of dollars.

“A 100 percent stock count on the 43 district offices and other council revenue collecting centres revealed a total of 188 POS machines. There were 19 POS machines that were located at district offices but could not be found on the bank list.
“It was also noted that there was a …POS ID which had dual identification codes hence the risk was that it was open for abuse and manipulation,” reads part of the audit.

The audit checked on all its bankers using the client’s duplicate receipts and merchant copies to trace sampled transactions for POS machines ID to debtors account, bank account and cash book but the procedure unearthed a huge scam as the devices were not linked to their respective cash books.

“It was noted that some of the banks did not have corresponding BIQ cash books, hence audit could not extract the BIQ cash books of such banks,” the audit revealed.Because of the lack of BIQ cashbooks, transactions made from such bank accounts were being posted into cashbooks in use on the day.”

According to Audit manager Archbald Nyamurova, some of the banks were delivering the POS machines directly to the district offices without going through the finance department.

As a result, the audit could not get a record of such machines at the banks’ head offices or at district offices except for Glen View and Budiriro.

He added that July 2017 reconciliations for one of the banks had not yet been checked because of challenges in the reconciliation process. 

“There was no integration of the receipting process. 
“The receipting process is a separate transaction to the POS machines transaction. 

“This means if a cashier swipes an amount say $100 from an … account and manually receipts the same in the BIQ in a … cash book; there is no cross reference between the two transactions.” 

Last year, a similar audit into POS machines showed that there was a mismatch in the city’s POS machine registers and their physical count.

According to minutes of an audit committee that met at the time, the use of POS machines, online and mobile banking and RTGS increased the city’s risk of fraud.

“The POS devices are a particular area of vulnerability to HCC because it does not appear as if the finance department was in full control of their deployment across council premises.

“Findings into the audit were that there was a mismatch between HCC register of POS devices, their physical count and the banks’ register of POS devices deployed.“The city’s POS devices were not integrated with the BIQ system,” read part of the minutes from the previous audit.

Harare continues to lose millions of dollars due to corrupt activities that have reigned supreme at the City Council and its high time heads roll because the audits have provided enough information for due processes to be initiated.

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