The contract signed between the Electoral Commission of Zambia (ECZ) and KPMG indicates that the commission was expected to pay about K800 million before the three-week audit of the commission was concluded.
The details are contained on page (4) of the contract signed by Essau Chulu and Joseph Jalasi on behalf of ECZ while Hastings Mtine signed on behalf of KPMG, as a senior partner in the firm.
The contract states that 40 per cent of the total amount that was agreed upon – which was K708 million in addition to value-added tax (VAT) at 16 per cent – was due to be paid at the start of the exercise while 20 per cent was to be paid three weeks later, which was the duration of the work.
The other 20 per cent should have been paid upon presentation of a draft report and the final 20 per cent upon presentation of the final report.
The ECZ commissioners signed the documents on November 4, 2010 but according to minutes of a meeting of December 31, 2010 attended by five officials from KPMG and seven from ECZ, director of the elections body, Dan Kalale advised that his team was not prepared for the meeting and promised to get back to the audit firm later.
While the letter of engagement delivered to Mr Kalale by former ECZ chairperson Florence Mumba indicated that KPMG officials would report to Mr Kalale throughout the audit period, Ms Justice Mumba, in her letter dated October 15, 2010, informed the firm that the final report should only be addressed to her.
However, a letter authored by Secretary to the Treasury Likolo Ndalamei to Mr Kalale dated December 30, 2010, stated that the ECZ director was the only controlling officer for the commission, and urged him to submit audited books of accounts to the Ministry of Finance and National Planning.
The letter indicated that the responsibility was not to be delegated to any other officer.
“You should submit to this ministry, in accordance with the law in your own signature, audited appropriated accounts in respect of each head of expenditure for which you are responsible, for incorporation in the financial report.
“This responsibility may not be delegated to any other officer,” Mr Ndalamei’s letter to Mr Kalale reads in part.
The secretary to the treasury formally writes controlling officers after the presentation of the national Budget every year, reminding them of their responsibility to manage their respective allocations in line with the Public Finance Act Section 7 (3) and financial regulation number five.
“As controlling officers, you are the chief accounting officer for your institutions,” Mr Ndalamei said in the letter.
Copies of special imprest statements are supposed to be sent to the office of the secretary to the treasury and copied to the auditor general’s office.
One of the signatories, Mr Justice Chulu, in an interview said he was unable to comment on the matter preferring to say something during the week since he had a family engagement.
In his memorandum to Ms Justice Mumba and commission members dated November 9, 2010, Mr Kalale advised that for ECZ’s power under Section 15 of the ECZ Act of 1996 to engage consultants up to the amount of K10 billion, the provision should be read with other laws as advised by the auditor general in her letter dated October 8, 2010.
He cited part 10 of the Constitution and the Public Procurement Act which state that even if such provisions existed, the Zambia Public Procurement Authority (ZPPA) should be informed in line with the ZPPA Act number 12 of 2008.
“Therefore, the appointment must be subject to tender laws and regulations,” Mr Kalale stated.
KPMG, in its letter of October 26, 2010 stated that it had accepted the terms of reference drawn by Ms Justice Mumba which stipulated that the firm should compile financial irregularities at ECZ ranging from impest retirement and adherence to internal audit guidelines.
Ms Justice Mumba quit her position on Thursday last week following a four-day work stoppage by workers demanding her resignation after revelations that she allegedly facilitated the single-sourcing of KPMG to conduct a three-week internal audit at K1 billion.
The allegation was strengthened by a letter written by Ms Chifungula dated November 9, 2010 describing the contract as irregular and in contravention of the Public Audit Act of 1980, the Constitution of the Republic of Zambia and the Public Finance Act number 15 of 2004.
And Anti-Corruption Commission (ACC) Director-General Godfrey Kayukwa yesterday told the parliamentary committee on legal affairs, governance, human rights and gender matters that the commission had started investigations into allegations of corruption at the ECZ.
Appearing before the committee, Mr Kayukwa said he had authorised an investigation into reports of corruption at the elections body.
He said the commission had received a report of corruption from the former ECZ chairperson Justice Mumba, tendered through the commission’s secretary Erick Kamwe, and one from former director Dan Kalale.
Justice Mumba was demanding that a thorough investigation be conducted at the commission to include all employment contracts, while Mr Kalale registered a complaint of flouted tender procedure at the institution.
“We are investigating allegations of corruption at the ECZ based on information released by former chairperson Justice Florence Mumba through Erick Kamwe as well as the other report from Dan Kalale,” Mr Kayukwa said.
And later in an interview, Mr Kayukwa said investigations into the alleged cases of corruption at the commission were in the preliminary stages and the ACC was gathering more information on the two complaints.
He said the commission intended to complete the investigations before this year’s elections because the image of the commission had been cast into doubt.
“We are working hard so that we can have credible elections. We want to make the findings of our investigations public before the next elections,” he said.
And ECZ spokesperson Cris Akufuna has said the confusion that rocked the commission will not affect preparations for the March 3 Mporokoso parliamentary by-election.
Speaking in an interview in Lusaka yesterday, Mr Akufuna said representatives of the 16 political parties that attended the January 28, 2011 meeting were assured that the by-election would be held as earlier planned.
He said ECZ would today brief officers mandated to oversee the by-election.
The Mporokoso seat fell vacant following the resignation from the MMD of area member of Parliament Maynard Misapa after President Rupiah Banda sacked him as Sports deputy minister.
Meanwhile, acting ECZ chairperson Pricilla Isaacs has said the Ministry of Finance and National Planning has assured the commission that funds are available for payment of outstanding arrears to mobile voter registration officers.
Submitting to the parliamentary committee on legal affairs, governance, human rights and gender matters yesterday, Ms Isaacs said the commission had initially received adequate funding at the commencement of the mobile voter registration exercise but that funding to the institution had been irregular.
[ Times of Zambia ]
Just from this article I realise I was wrongly made to believe that Justice Mumba was the wrong one but nay. Seems KPMG was engaged to carry out a speacialised forensic audit and considering the work involved the fee was just within range. I think alot of people were unsettled at the prospect of being caught with their pants down. And what is wrong with addressing the report to the chairperson. That is proper accounting procedure. No wonder there is too much plunder in GRZ, the thieves are always the heroes.
ZAMBIA ONE, You seem to be ignorant about the Public Procurement Act. Why have you opted to ignore the content of the letters from Secretary to the Treasury and that from Auditor General’s Office. It is not about who was to be caught pants down but the manner in which KPMG was engaged. Pliz go to ZPPA and be enligtened about Procurement procedures and its thresholds.
I think there is serious corruption at ECZ and thats why Justice Mumba wanted a thorough audit which unsettled all those workers. Especially about qualifications. All government employess hate the talk about qualifications they know they lack in that area and fear losing jobs. Now on engagement of KPMG yes it should have gone to tender but I dont think its necessarily so in all cases. Let the truth come out then we shall see the real vultures.
Okay more confusion!:-w
every procedure as exceptions,and these thieving people knew the system and how to manipulate it,and thus the chairperson decided to go unorthodox to get these suckers…but with the thieving government machinery on their side, it just couldn’t be done that way….Zambia is a shame!! a country with such resources looking like a war stricken zone,what’s there to boast about when only your mansions are developed? You are the only ones who drive nice vehicles coz you abnormally tax others when they bring in new cars?
You will burn in hell!!!!
his just goes to show how the whole system from ecz, min of finance, ago, and zppa are nothing but sum pieces of s.h.i.t, no cordination whatsoever, its no wonder the chaps are on father xmas looting the few coins remaining in the state coffers. Mwanya bafikala we are coming after all of you.
i used to work for KPMG, under Hastings..the one thing i realized as an Auditor was that your Opinion will always be overridden by the Partner ( Boss ) if the report is going to expose the Client.What would happen is that when you draft a Management Letter, the Partner will influence the outcome so that the Client is not upset.Bottom line is that Audit’s especially in Zambia are not independent.Remember Enron vs Anderson? my feeling is that the contract was drafted mostly to benefit the actors because the recommendation would have not achieved anything just another report gathering dust.
There is so much happeneings at ECZ. The auditor engagemtn was not done in good faith. Equally Dan Kalale was un touchable, reporting to the power in POWER the MMD. No wonder George Kunda wanted Dan’s contract renewed.
Circus towards elections. surely and criminality & criminal elements have started moving to ECZ. Free for all. Criminal ECZ mandated to run the Mporokoso By-elections. A criminal result will come out. Watch this space!!!!!!!!
From my reading, it appears Judge Mumba and co engaged KPMG for a forensic audit (one off consultancy/special assignment, if you like). The Auditor General and Secretary to the Treasury appear to be commenting on provisions for engaging an auditor for annual financial audits. Now, these two are different.
# 2 I have not ignored. The ECZ act gives them right to engage consultants upto K10 billion. Individuals will now manipulate the law so that they are not caught pants down. You think Justice Mumba doesnt know the law? She and all the other commissioners didnt know about the legality of engaging a consultant? Danny Kalale and his minions have amassed massive wealth from the ECZ. This country has to live up to getting rid of corrupt and thieving characters.
# 1 & 3,
Was the tender procedure strictly observed to make this outsourcing legally binding? In public procurement, is it a norm to abrogate procedures signed to observe? Could such breach be acceptable and a desired precedence you want public institutions to follow? How and what criteria was applied to give KPMG such an expensive contract from the market of many service providers? Kindly advise because soon my consultancy business will be expanding to Zambia with aim of going for lucrative GRZ services.
Folks, was this relly a forensic audit or annual audit? Lets llok at the outcome of the investigation by ACC becoz both accussed have lodged cases of abuse. We are yet to hear who the complainant will be and who is to be the accused/defendant. Nice one eh!
This whole thing has just been mismanaged. If Justice Mumba was aware of misdeeds at the ECZ, she would have been well advised to quietly prompt the GRZ or any one else to instigate an investigate. She could have then just said its ‘those people’ who are investigating this. One thing for sure, the can has a lot of live worms in it, hence the panic. The can needed to be opened as soon as so that the worms were caught by surprise. May be that is why the Justice wanted to cut out the tendering procedure which (can be cumbersome) could have alerted the worms.
So where is the integrity of the Auditing standards that these firms say they follow. It all about the money.
Zambians are very frustrating. What do people in Zambia want? On one hand, Hon Dora Siliya was houinded by the public on exactly the same issue of ignoring procurement procedures. Siliya resigned and the case went to court. She was brought back when she was acquitted. So what is wrong with letting Justice Mumba go through the same process? Are we going to have one rule for those we like and another for those we do not like? It may appear as thouigh the President is ‘callous’ as The Post has insinuated today, but really, don’t people realise that these men and women are empowered by the constitution and the laws of Zambia to act as they do? The ECZ Chairman had the right to call foer an audit, but she is using your money without authority! That is the problem!
Until Dan Kalale talked after he was fired, Justice Mumba did not approach the ACC to investigate. Why did she not do that before hand if she is a woman of integrity as they say?
Remember she was in charge. There was no reason why she should have called KPMG, who are not Forensic auditors and have no legal power to prosecute anyone. She is a Judge, and she should know better! Electionas are held once in 5 years, why did she wait until elections year to carry out an intrusive audit while the ECZ is preparing for major elections? Dan Kalale may be corrupt, but Justice Mumba is naive and plain s t u p i d.
As far as I am concerned, both Dan Kalale and Justice Mumba’s positions are untenable and BOTH MUST GO! There are other Zambians who can do these jobs better and the sooner we have people of integrity and true grit, the better. I am so amazed that so many Zambians who have the weight of the Constitution behiond them like DPP, Auditor General, Chairman ECZ find themeselves threatened by individuals. The constitution of Zambia specifically gave these people security of tenure and independence of action so that they can never be hounded out of office. If they do resign, like Mukelabai and now Justice Mumba it is their own fault, and probably pride and so not worthy of these august offices!
Zuma # 7 you are Absolutely right. These accounting firms always decide to “protect the client”, thats the nature of that business. They would be out of business if they did not do that. But they cliam to be complying with the accounting standards when infact they compromise with them. There is also a question of intergrity on the part of the so called partners. How bout if KPMG provide a public report becuase thats is government money.
You can certainly see your skills in the work you write. The arena hopes for more passionate writers such as you who aren’t afraid to say how they believe. Always go after your heart.