The Auditor General’s office has highlighted glaring poor financial and operational performance in the audited entities in the report on accounts of Parastatal Bodies and other Statutory Institutions in the year ended 2015.
In a statement released by Ellen Chikale the public relations manager at the Auditor General office,
The report indicates that over 1.2 billion was not remitted as statutory contributions to NAPSA and ZRA.
Ms Chikale said non remittance which is a statutory contribution does not only deprive government of revenue but that it also disadvantages employees at the time of termination.
“The report of the auditor General on Accounts of Parastatal Bodies and other Statutory Institutions for the financial year ended 31st December 2015 is out with an overall tone of poor financial and operational performance in the audited entities.
“The report has highlighted non remittances of statutory contributions to napsa and zra of 1.2billion as the highest irregularity in the period under review.
“Non remittance which is a statutory contributions deprives government of the revenues and consequent may disadvantage the employee of their benefits at the of termination,” reads the statement in part.
She further said that the report highlighted questionable payments as the second highest irregularity at over K24 million followed by unaccountable stores at slightly over K20 million
“The report also reviewed questionable payments of 24 million as second highest irregularity followed by unaccountable stores of 20 million. Unsupported payment also features at 6 million while failure to recover loans at 4million.
“The report has also listed 27 institutions that had not produced audited financial statements for the financial years up to 31st December 2016 contrary to their enabling acts and the tenets of good corporate governance,” she said.
Since time immemorial the preceding auditor generals’ reports have been marred with grand financial irregularities. A cross cutting analysis of reports in the past have revealed an upward trend of gross financial irregularities and embezzlement since the inception of multi party democracy in Zambia.
Below is the full statement
12 th January 2017
To: The News Editor
For Immediate Release
The Report of the Auditor General on the Accounts of Parastatal Bodies and other Statutory Institutions for the financial year ended 31 st December 2015 is out with an overall tone of poor financial and operational performance in the audited entities.
The report has highlighted Non-remittance of Statutory contributions to NAPSA and ZRA of K1, 219, 671, 599 as the highest irregularity in the period under review.
Non-remittance of statutory contributions deprives government of the revenues and consequently may disadvantage the employee of his benefits at the time of termination of their service.
The report also revealed questionable payments of K23, 733, 573 as second highest irregularity followed by unaccounted for stores of K20, 245, 512. Unsupported payment also featured at K5, 557, 547 while failure to recover loans was at K4, 394, 978.
The Report has also listed twenty seven (27) institutions that had not produced audited financial statements for the financial years up to 31 st December 2016 contrary to their enabling Acts and the tenets of good corporate governance.
Among other issues raised in the report include:
I. Board of Directors – Institutions such as the Chambeshi and Southern Water and Sewerage Companies and ZAWA had no boards during the time of audit. In addition, water utility companies (Chambeshi, Lukanga, and Southern Water Companies) had performed poorly on most of the indictors of their service delivery.
II. National Housing Authority (NHA) – There were weaknesses in the recruitment and removal of the CEO and consequently the irregularly paid salaries in advance. The institution had poor financial performance, poor management of properties and a questionable going concern status.
III. Mulungushi Village Complex – The institution questionably declared dividends based on the profit that arose as a result of revaluation gain on investment properties and income tax recovery. It had been failing to collect rentals from Government Institutions, had questionably appointed its Operations Manager as well as failed to settle its internal frozen benefits, and also failed to rehabilitate and maintain its investment properties.
IV. Lack of Title Deeds – The properties for the water utility companies, properties for Kwame Nkrumah University (the main and east compasses), properties for ZRA in various towns valued at K15,170,900 properties for ZAFFICO (48,800 hectares of plantation and 109 other properties) properties for TAZARA valued at K343,003,964 all did not have tittle deeds.
The report was tabled in Parliament and is now a public document which can be accessed from Office of the Auditor General in Long acres and the office website: www.ago.gov.zm in due course.
Attached is a summary of findings for your further scrutiny.
Summary of Findings Amount K
Non Remittance of Statutory Contributions 1,219,671,599
Unsupported Payments 5,557,547
Unaccounted for Stores 20,245,512
Unretired Imprest 1,135,994
Missing Payment Vouchers 1,614,675
Wasteful Expenditure 258,640
Questionable Board Expenses 183,075
Failure to submit expenditure returns 436,923
Unacquitted Payments 72,178
Irregular Issuance of Fuel 93,314
Questionable Procurement of motor vehicle 4,377,066
Unexplained Bank Debits 226,075
Irregular Procurements 2,292,133
Undelivered Stores 1,243,692
Questionable Payment of Leave Comutation 145,233
Questionable Payments 23,733,573
Delayed banking 2,379,597
Unaccounted for Revenue 676,506
Failure to recover loans 4,394,978
Issued by: Ellen Chikale (Ms.)
Head Public Relations