THE Auditor General’s Report has revealed that a company engaged by the Ministry of Works and Supply failed to commission a commercial web offset printing press after US$8,668,570.63 was paid.

And the Report has disclosed that that payments in amounts totalling K920,808 processed by the Ministry were not supported with documentation such as acquittal sheets, receipts and purchase orders.

According to the Report of the Auditor General on the accounts of the Republic for the financial year ended 31st December 2019, a physical inspection of the installed components of the web press revealed that the combination folder had developed rust.

“In an effort to improve the operations of the Government Printing Department, the Government embarked on an exercise to modernize the operations of the Department in 2011, by procuring new printing equipment and improving the security system. To achieve this, a company was engaged to supply a web printing press while another was engaged to install a closed-circuit television (CCTV), access control and fire detection system. In paragraph (40) of the Report of the Auditor General on Accounts of the Republic for the financial year ended 31st December 2015, mention was made of the failure to commission a commercial web offset printing press for Government Printing Department,” read the report.

“In their Report for the Fifth Session of the Eleventh National Assembly, the Public Accounts Committee urged the controlling officer to ensure that the web printing press was commissioned. A review of the situation in August 2020 revealed that the printing press had not been commissioned and the following were further observed: The contractor had been paid amounts totaling US$8,668,570.63, representing 97.6 percent of the contract sum, leaving a balance US$211,429.37. The equipment was not fully installed in that some components such as the log stacker (bar code), stitcher with four stations, three knife trimmer and a 750 KVA standby generator set were not installed. A physical inspection of the installed components of the web press revealed that the combination folder had developed rust”

It revealed that accountable imprest in amounts totalling K1,534,457 was issued to several officers to procure materials for painting, cleaning, sanitation and printing, among others, whose values could be ascertained.

“Financial Regulation No. 86 (c), states that ‘Accountable imprest is imprest that is issued as payment to facilitate the purchase of goods and services whose value cannot be ascertained at the time’. Contrary the regulation, accountable imprest in amounts totalling K1,534,457 (K28,600 – Ministry operations and K1,505,857 – State functions) issued to several officers was used to procure materials for painting, cleaning, sanitation and printing among others, whose values could be ascertained,” it stated.

The Report disclosed that the ministry procured various goods and services in amounts totalling K1,934,722 without withholding VAT totaling K266,857.

“The Value Added Tax (VAT) Amendment Act No.12 of 2017 read together with the Treasury and Financial Management Circular No. 6 of 2017 directed all institutions which were appointed as tax agents to withhold and remit VAT from payments to suppliers of goods and services to the Zambia Revenue Authority (ZRA). Contrary to the Act and circular, the Ministry procured various goods and services in amounts totalling K1,934,722 without withholding VAT in amounts totaling K266,857,” read the Report.

It further disclosed that the ministry paid a local hotel K30,575 for conference facilities without obtaining authority from the Secretary to the Cabinet.

“Cabinet Office Circular Minute dated 24th November 2016 requires that authority be obtained from the Secretary to the Cabinet for government departments to use private facilities where conference facilities are unavailable or insufficient in terms of capacity. Contrary to the circular, on 24th May 2019, the Ministry paid a local hotel an amount of K30,575 for conference facilities without obtaining authority from the Secretary to the Cabinet,” read the Report.

It also disclosed that the ministry engaged ten contractors and two suppliers for total contract sums of K24,865,908 to undertake rehabilitation works at selected residences and government departments, and to supply equipment for government printers.

However, documentation such as contracts, were not availed for audit as at 31st August 2020

“Clause 18(3) of the Public Procurement Regulations of 2011 provides that all contract management records maintained should contain documents such as signed contract documents, amendments and any variations, minutes and progress reports,

completion certificates and cumulative payment worksheets.

The following were observed: During the period from 2013 to 2019, the Ministry engaged ten contractors and two suppliers for total contract sums of K24,865,908 to undertake rehabilitation works at selected residences and Government departments, and to supply equipment for Government Printers,” the Report stated.

“However, documentation such as contracts, variation orders, interim certificates, progress reports and completion certificates for three contracts with total sums of K10,364,192 were not availed for audit as at 31st August 2020. In addition, the Ministry engaged three other contractors for construction and renovation of various infrastructure. However, the contract amounts and documentation such as contracts, variation orders, interim certificates, progress reports and completion certificates were not availed for audit,” the Report stated.

It stated that amounts totalling K10,747,359 were made to 20 vendors for various projects and supply of goods and services but cumulative payment worksheets for payments made were not maintained by the Ministry.

“Payments in amounts totalling K10,747,359 were made to 20 vendors for various projects and supply of goods and services.

However, cumulative payment worksheets for all payments made to each vendor were not maintained by the Ministry,” the Report read.

It stated that payments in amounts totalling K920,808 processed by the Ministry were not supported with documentation such as acquittal sheets, receipts and purchase orders.

“Financial Regulation Nos. 45 (2) and 52 (1) require that all payments by cheque or cash for goods, services and works should be supported by cash sale receipts, official orders and suppliers’ invoices. Contrary to the regulations, payments in amounts totalling K920,808 processed by the Ministry were not supported with documentation such as acquittal sheets, receipts and purchase orders,” the Report stated.

Meanwhile, the Report stated that stores items costing K976,626 procured by the Ministry were not accounted for in that there were no receipt and disposal details.

“Public Stores Regulation No. 16, requires that every store officer or any other officer having in his charge any public stores or other articles of public property must keep and maintain record of the receipt and issue of such public stores.

Contrary to the regulation, stores items costing K976,626 (general stores – K585,952 and fuel – K390,674) procured by the Ministry were not accounted for in that there were no receipt and disposal details,” stated the Report.