Restocking cost government K3.6 bn between 2OO3 and 2OO6 in Southern Province

1. I have a question. Where did the K2 Billion Chiluba gave to the people of Southern province go for the same program during his reign?Just curious.

2. ZAMTEL PAYS K113M. TO ‘NOBODY’
   THE Auditor-General’s latest special report has revealed that the Zambia Telecommunications Company Limited (ZAMTEL) allegedly remitted over K113 million to a foreign company to pay for a half-page advertisement in the Fortune Magazine of the United States. The transaction, which was made in two equal installments to Global Business World, was carried out between May and October 2002. Auditor-General, Anna Chifungula, said inquiries with ZAMTEL management revealed that there was no evidence to show that the advertisement was published in the named magazine and that no contract was signed. In his November 2006 response to inquiries, ZAMTEL managing director stated that the company had made efforts to trace the advertising agency that was paid the money but that such efforts had been fruitless. “He stated that all the contact telephone numbers on the file were not working.The managing director further said the authority to pay was made by the director of commercial services who was no longer with the company,” Mrs Chifungula said. She said ZAMTEL also entered into an agreement with Manda Hill Centre Limited to rent Shop No. 27 A at Manda Hill Shopping Complex at a cost of US$3,656 per month.However, despite the agreement having been signed in May, 2003, the company only started operating from the shop 16 months later when it had already paid K317,153,277 (US$66,531). When asked why the company did not start operating from the shop upon signing the agreement, the managing director said the commercial department could not do so because the building was still under renovation. It was also observed that despite the Bank of Zambia’s directive that the company’s transactions be denominated in Kwacha, ZAMTEL went ahead to pay rentals in US Dollars.The special report also revealed that salaries and allowances of the National Airports Corporation Limited (NACL) managing director, directors and the corporation secretary were pegged in US Dollars.This was contrary to Government’s directive or policy on the use of foreign currency on local experts. And in 2005, when the Kwacha appreciated against the US Dollar from K4,900 in April to K4,650 per dollar in July, NACL directors requested their board in August to revise their salaries because of the exchange rate that had dropped following the local currency’s appreciation.The board accepted the request and fixed the directors’ salaries at K4, 900 per US Dollar when the exchange rate was at K4, 420.The board also gave the directors salary arrears from April 2005, to compensate for the months the local currency appreciated.This resulted in the corporation paying a total of K15,734,000 to the managing director and five other directors.The report has further observed that the corporation did not hold title to any of the airports in the country contrary to sections 25 and 29 of the Aviation Act Cap 444 of the Laws of Zambia.

3. STATE LOSES K110 BILLION
   GOVERNMENT has lost over K110 billion in irregular payments to contractors engaged by the Ministry of Works and Supply, Auditor-General, Anna Chifungula, has revealed in a special audit report released yesterday.The report titled: “Administration of selected contracts in the Ministry of Works and Supply,” says 14 contracts were over-paid by K110, 678,772,372 million because of avoidable variations that officials allowed between 2000 and 2006.“The payments of these variations and fluctuations are not a fair charge to public funds,” Ms Chifungula said. “There were other charges which could not be explained for lack of documentation on them.” Ms Chifungula explained that between 2000 and 2005, the Ministry of Works and Supply entered into contracts with various contractors but the management of the contracts was poor and therefore caused huge losses of State funds.“Consequently, contracts which could have been discharged at lower costs ended up being discharged at higher costs due to variations and fluctuations in labour and material costs and interest on delayed payments,” she said. Of the various extra payments beyond what was originally agreed, K16.8 billion was cited as unexplained charges and K1.6 billion as interest.She said the extra costs could have been avoided had the rights and obligations provided for in the contracts been complied with by both parties.In a detailed account illustrated by pictorial evidence of site inspections of unfinished and poorly done works, damaged roads and works not done at all but for which payment had been made, the Auditor-General lamented the wasteful expenditure she said was avoidable.Some of the works in question include the Chirundu road which gobbled an extra K32.9 billion; the Chitondo-Namwala road (K56 billion), and the reconstruction of the Kasama-Luwingu road (K14.9 billion).The Auditor-General also questioned the 17 months-delay in the commencement of the construction of the freight terminal at Chirundu, a situation that cost Government an additional K1 billion.“It is not clear why, contrary to the Appropriation Act, the Ministry (of Works and Supply) budgeted for an activity in 2004 which was only going to commence in 2005,” she said.“It is also not clear why commencement of the works was delayed. As a result of the delays, the contractor made claims in labour and material fluctuations amounting to K894, 118,717.” The claims were at the ruling bank interest rate.In some cases, such as the Sable Transport works on the Kasama-Luwingu road, the contractor piled up gravel on the road for a long time and when it was washed away by rains, the firm returned to claim extra payment and that was allowed.And Tarcon Construction had its tarmac works of February 2006 peeling off in less than a year because of the thinly spread-out layer.The culverts it put at several points were left blocked while others got vandalised. And in another special audit on parastatal bodies, the Auditor-General reveals glaring irregular payments on expenditure including K4 trillion which the disbanded Central Board of Health (CBoH) spent without following tender procedures.Mrs Chifungula disclosed in her 2005 special report covering the period 2005to March 31, 2006, that CBoH did violate Government tender regulations when they spent K3, 736, 484, 550 on accommodation facilities for workshops and other procurements in what appears like panic spending in the final days of the national health body whose dissolution was hinted two years earlier.”A scrutiny of records relating to purchases of goods and services and related supporting records revealed that payments made in respect of accommodation facilities on seminars and workshops were made without obtaining three competitive quotations, contrary to procurement guidelines,” Ms Chifungula said.Payments for allowances in respect of workshops and seminars amounting to K618, 687,455 were not supported by acquittal sheets and were not made available for audit, thereby violating Financial Regulation No. 156.Payment vouchers amounting to K3,108,000,968 also went missing, making it impossible to verify the authenticity of the transactions. And contrary to CBoH workers’ conditions of service that no employee should be granted a salary advance before the earlier one was fully recovered, cash advances of up to K178,907,350 were not recovered.The report also reveals that the former director-general went away with a CBoH vehicle after the board was dissolved in March last year.Mrs Chifungula also said the Medical Stores used K4,640,080,490 to purchase drugs without supporting documents such as purchase orders, invoices and goods received notes, contrary to Financial Regulation No.156.”This could therefore, not be verified.We could not obtain assurance that these payments were made on account of obligations of the Ministry of Health,” she said.Medical Stores also used K2,290,357, 853 to buy drugs that up to now had not been received and no receipts and disposal details were available.And 30 tonnes of drugs expired because of over-stocking and poor storage, costing the taxpayer a whooping K24.3 billion. “The expired drugs were not destroyed but were merely removed from warehouse and stored at the company’s premises,” Ms Chifungula said.She also observed that the fixing of the remuneration package of the Zambia National Tourist Board managing director, by the Ministry of Tourism, Environment and Natural Resources in 2005, was irregular as it was contrary to the Act. The ZNTB managing director’s remuneration was pegged at K47, 240, 000 per month, by far exceeding other chief executives of grant-aided groups within the same ministry.For instance, the Zambia Wildlife Authority director-general got K22, 306, 900 while his counterpart at the National Heritage Conservation Commission got K15, 149, 192 and lowest was the Museums Board director at K12, 250, 177.

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