Zimbabwe's auditor general Mildred Chiri has questioned the ability of state-owned mobile firm NetOne to continue to operate based on several financial risks identified by her office.

NetOne is among a group of state-owned telecom companies the government has earmarked for privatisation.

However, according to an audit report released this month, poor corporate governance practices and financial risks are "bleeding the company and holding it back from profitability."

Chiri said NetOne's "current liabilities exceeded its current assets by $59,381,639 the year ended December 31, 2018" and this represents conditions which indicate "the existence of a material uncertainty that may cast significant doubt about the company's ability to continue operating" as a going concern.

Monetary policy shifts in Zimbabwe, which saw the country change its accounting currency from US Dollar to local currency, and exchange rate distortions maintained by the government at 1:1 until February this year have also affected the company's financial position.

Zimbabwe instituted further policy changes by removing foreign currencies as legal tender and re-introducing the Zimbabwe dollar which was abandoned in 2009.

Chiri also referenced the absence of an allocation register for test lines.

According to the audit report, NetOne has as many as 2,920 active test lines which are listed under trade receivables balance amounting to US$500 840 as at the end of the December 2018 trading year.

"Test lines might be used for non-testing purposes resulting in financial loss to the Company. The Company should de-activate test lines upon completion of the testing process," recommended Chiri. "An allocation list for all test lines should be prepared and should be monitored."

NetOne said it would review the existing controls around test lines and explained that the bulk of the test lines (approximately 2 280) were allocated to roaming partners.

A statement from the company reads: "Measures have been put in place to turn around the performance of the Company. The focus is on growing revenue through improvement of quality of network, distribution and customer experience."

These include successful implementation of the mobile financial services strategy, development of new into the media space, establishment of franchise shops to sell airtime and SIM cards, as well as approval by the board of balance sheet restructuring initiatives to unlock capital for investment.