By a Correspondent
The Auditor-General has flagged serious weaknesses in inventory management at the National Pharmaceutical Company (NatPharm), revealing that medicines worth US$3.1 million expired and were written off in 2025 due to inadequate controls over stock monitoring.
The losses uncovered by the Auditor-General come at a time when public health institutions across Zimbabwe are grappling with critical shortages of essential medicines, raising concerns over the wastage of drugs that could have helped ease pressure on the country’s strained healthcare system.
In the Auditor-General’s report for the year ended December 31, 2025, NatPharm received a clean audit opinion on its financial statements. However, the audit identified several governance and operational shortcomings that could affect service delivery.
According to the report, NatPharm lacked adequate internal controls over inventory management and did not have documented processes to systematically identify and monitor medicine expiry dates.
As a result, medicines valued at US$3.1 million expired and had to be written off.
The Auditor-General warned that poor inventory management could compromise service delivery and recommended the implementation of stronger controls over stock management.
In response, management acknowledged the finding and said a formal Standard Operating Procedure for monitoring inventory expiry dates would be implemented by April 30, 2026.
The audit also found that employee fringe benefits were not being processed through the payroll system and were therefore not subjected to tax.
Assets sold to employees below market value generated taxable benefits amounting to US$15,652, while interest-free staff loans created deemed interest benefits that were not included in employees’ taxable income as required by the Income Tax Act.
The Auditor-General warned that the company could face financial penalties for non-compliance with tax regulations.
Management said the company would calculate and recover the tax due through payroll deductions and remit the necessary tax obligations to the Zimbabwe Revenue Authority (ZIMRA). The company also plans to introduce quarterly tax compliance reviews and automate fringe-benefit calculations through a new human resources and payroll system.
The report further revealed governance challenges, including delays in the appointment of board members by the parent ministry.
As a result, NatPharm operated without a board from September to December 2025, contrary to provisions of the Public Entities Corporate Governance Act, which requires board vacancies to be filled within 90 days.
The Auditor-General warned that the absence of a board could compromise oversight of the company.
NatPharm management said it had submitted a request for the timely reappointment of board members before the expiry of the previous board’s tenure, but the process was delayed by the appointing authority.
The audit also highlighted long-standing vacancies in key positions, including ICT Manager and Procurement Officer, with some positions remaining unfilled since 2020. Other critical vacancies were reported in procurement, finance, sales and human resources.
The Auditor-General said the staffing gaps could negatively affect service delivery and urged the company to fill the positions.
NatPharm, which is responsible for procuring, storing and distributing medicines and medical supplies to public health institutions across Zimbabwe, made mixed progress in addressing previous audit findings.
While statutory obligations were settled in 2025, issues relating to inventory variances, the recovery of company assets and the review of governance manuals remained unresolved or were only partially addressed.
