Hidden financial audit on government uncovered

Hidden financial audit on government uncovered

An audit report that the PF has been hiding has surfaced. The audit carried out by the auditor General’s office has been deliberately concealed from the general public as it documents abuses and theft in government ministries.

He is  a report specifically on the ministry of Transport, Works and Supply:

CONFIDENTIAL

MINISTRY OF TRANSPORT, WORKS, SUPPLY AND COMMUNICATION

BUDGET AND FUNDING

In the Estimates of Revenue and Expenditure for the financial year ended 31st December 2014, a total provision of K891, 295,959.68 including a Supplementary Provision Warranty of K27,157,057.68 was made  to cater for the operations of the Ministry.

The treasury released amounts totalling K698, 397,796.71   resulting in an under funding of K218, 739,860.97. As of 31st December, 2014, the Ministry had spent a total amount of K689,682,378.16 , leaving a balance of K8,715,418.55.

  1. Excess Expenditure

An analysis of released funds and actual expenditure of various programmes  revealed that             Events programme that were funded K1,513,458.00 had actual expenditure in amounts totalling K4,825,257.36 thereby over spent by K3,311,799.36.The source of excess funds could not be ascertained

 Screen Shot 2016-05-12 at 13.01.38 Screen Shot 2016-05-12 at 13.01.29b.Misapplication of Funds

The Ministry received amounts totalling K2,200,000 to cater for the routine building maintenance and construction of office blocks for Chinsali and Choma Provincial Buildings Engineers. However the works had not been done as of December 2014 as funds had been applied on activities not related to the purpose for which funds were released contrary to the Appropriation Act of 2013.

The source of the excess expenditure of K209, 362.15 was not disclosed. See table below.

c.Irregular Purchase of Equipment

 

According to Statutory Instrument No.22 of Control and Management of Public Stores Regulations, the Department of Office Equipment Maintenance Services is mandated to carry out inventory and registration of all Government Office Equipment. This is done in order to promote accountability and provide professional advice on procurement in order to ensure compatibility and easy maintenance.

During the year under review, the Ministry purchased various pieces of equipment such as computers, printers, laptops among others valued at K1, 313,509.55 from fifty one (51) local suppliers. However, there was no evidence that professional advice was sought from the Department of Office Equipment Maintenance Services on equipment purchased for compatibility and easy maintenance

d.Procurement of Dredger’s/Cargo Vessels

In September and October 2014, the Ministry, engaged four(4) contractors for the supply of thirty (30) dredging machines costing US$43,110,090.80 and three (3) contractors for the supply of five (5) Cargo Vessels costing US$5,336,984 bringing the total contract sums to (US$48,447,074.80 ) K357,916,353.252.

As of June, 2015 a total of K63,893,665 ( US$ 8,634,279) had been paid. Only three (3) dredgers had been delivered, leaving a balance of twenty seven (27)  still to be received. See table below;

e.Questionnable Contracts

The Ministry entered into contracts with five (05) local contractors for the construction and rehabilitation of various maritime infrastructure in amounts totalling K90, 739,341.32.  See  table below

DATE TOTAL CONTRACT SUM (ZMK) PURPOSE PAYEE EFTA AMOUNT Paid on certificates (ZMK) OUTSTANDING BALANCE
22.05.15 K60,303,155.01 Construction of  Embankments and RC Landing Jetties at Banbweulu in Luapula Province Angel Construction Ltd 29359 K12,000,000 K48,303,155.01
11.06.15 K490,616.54 Construction and Rehabilitation of Maritime infrastructure in Chilubi District,  Northern Province Clestmark Investments Ltd 29364 K98,123.30 K392,493.24
11.06.15 K1,436,676.65 Construction and Rehabilitation of Maritime infrastructure in Nchelenge District. Peace Cops Investments Ltd 29365 K404,181.18 K1,032,495.47
11.06.15 K2,292,893.12 Construction and  Rehabilitation  of Maritime Infrastructure in Samfya – Luapula Province Kawanzane Enterprise Zambia Ltd 29366 K709,684.69 K1,583,208.43
K26,216,000.00 Shaftex Ltd K26,216,000.00
TOTAL K90,739,341.32       K13,211,989.17 K77,527,352.15
 

No supplementary estimates were applied for to finance the outstanding contractual amounts as indicated above.

  1. Questionnable Contracts to Supply Spare Parts for Dredgers

In June, 2014 the Ministry engaged two (2) contractors for the supply of spare parts for dredgers at contract sums of K13, 126,592.00 .See table below;

Although the Ministry engaged the contractors for the supply of spare parts and amounts totalling K13,126,592.00 paid, it was not clear why the decision was made when the dredgers were under one (1) year warranty. In addition, the spare parts were procured in August 2014, a month before the contracts for the procurement of dredgers were signed making the transaction questionable and causing wasteful expenditure of public funds by procuring spare parts that were not of immediate use

Further, a verification  carried out in June 2015 revealed that not all parts had been delivered and the Ministry staffs were unable to identify some spare parts making it impossible to ascertain the parts delivered and undelivered.

  1. Housing Maintenance of VIP and Other Leaders Houses

 Completion of Rehabilitation Works for the Presidential Guest House in Kitwe

On 14th November 2013 the initial  contractor was instructed to omit all the outstanding works on  minute number SA5: BDHQ/101/16/61  with works in amounts totalling K2,291,863.77 representing 54% of the contract price already paid for  leaving a balance of K 1,925,006.50.

On 5th May 2014, the Ministry engaged another contractor,  Hua Chang Infrastructure Engineering Zambia Limited at a contract price of K6, 538,696.33 to complete rehabilitation works for the Presidential Guest house in Kitwe. As of 4th November, 2014 the contractor had been paid amounts totalling K3, 166,384.66 leaving a balance of K3,372,311.67.

A physical inspection of the works carried out in June 2015, and a review of the status reports revealed that the rehabilitations had been completed. However, a review and comparison of the scope of works and the works done, revealed that works/materials in the bills of quantities worth K378, 810.00 included in the contract price were not supplied or executed by the new contractor and no replacements of some old existing items were carried out by Hua Chang Infrastructure Engineering Zambia Limited and some bills of quantities were subject of repetitions

  1. Construction of Kasama Airport Runway.

On 8th May, 2014, the Ministry engaged Anhuishutan construction Group Corporation limited to construct Kasama Aerodrome at a Contract price of K141, 012,639.20. The contract period was for twelve (12) months.

On 15th December, 2014, the Ministry paid an advance payment of K28, 202,522.84 on Efta number 0003919 being 20% of the contract price. The payment was made against a bank guarantee which was running form 29th May, 2014 to 23rdMay, 2015 which had expired as of June 2015 .

However,  there was no certificate to indicate the value of works completed.

As of  June 2015  the contractor had mobilized and cleared a stretch of 1.5kilometres by 45metres stretch of the Runway. It was also observed that other related works had not commenced as the consultant for the project had not been appointed thirteen (13) months after the contract was signed.

  1. Construction of a Fire Station at Chipata Airport

The Ministry entered into contract with Messer’s DWA Zambia Ltd of Chipata for the construction of Fire House at Chipata Airport on 24th September, 2013 at a contract sum of K1, 143,015 and works were to be completed within the period of four months to 31st January 2014.

A mounts totalling K556, 683 had been paid towards the contract leaving a balance of K586, 332.

A physical inspection of the project carried out in May, 2015 revealed that the Contractor had abandoned the project and the structure was at roof level.

 

Comment

  • The government is using this scheme of contracting companies that are not carrying out their contractual obligations and are owned by it’s party members or symphasizers as conduits to receive money from the government for party campaign activities at the expense of service delivery to the citizens.
  • This is plunder of national resources which is your money.

 

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