THE Auditor General’s Report has revealed that the Patents and Companies Registration Agency (PACRA) spent over K14 million, which was originally meant for construction of an office block, on personal emoluments.
And the Report says information such as registration numbers for 16 clients and addresses of registered offices for 17,082 clients vanished from PACRA’s system.
According to the Auditor General’s Report on the Accounts of Parastatal Bodies and other statutory institutions for the financial year ended December 31, 2018, PACRA failed to utilise funds amounting to over K14 million meant for the construction of an office block because they were diverted to personal emoluments.
“Misapplication of funds reserved for the construction project on 4th February, 2013, the Agency opened a fixed deposit account with a local bank with an initial deposit of K15,000,000. As at 28th June, 2016, the balance on the account had accumulated to K19,235,173. In this regard, the Board directed management to set aside K17,000,000 from the fixed deposit account for the construction of a new office block. However, out of the K19,235,173 available, amounts totalling K14,542,198 were applied on unrelated activities, such as payments of personal emoluments and other 74 operational costs without Board authority leaving a balance of K4,422,212. Consequently, as at 31st December, 2019, the construction of the office block had not commenced,” the Report disclosed.
The Report stated that PACRA had over K2 million deducted as Pay as You Earn (PAYE) that was not remitted to the Zambia Revenue Authority (ZRA).
“Non-remittance of tax, contrary to the Income Tax Act Chapter 323 of the laws of Zambia, which required the Agency to remit taxes promptly to ZRA, amounts totalling K2,027,572 deducted as Pay as You Earn (PAYE) in November and December, 2018, were not remitted to the ZRA as at 31st December, 2019. Delayed transfer of revenue to Control 99. During the period from January, 2016, to December, 2018, PACRA received amounts totalling K17,038,639 in respect of various fees collected by the World Intellectual Property Organisation (WIPO) and the African Regional Intellectual Property Organisation (ARIPO) on behalf of the government,” it stated.
The Report also disclosed that the Agency delayed in transferring funds to Control Account 99, which deprived the Treasury of much-needed revenue.
“However, the Agency delayed transferring funds to Control 99 from the Operational Account for periods ranging from 12 to 187 days, thereby, depriving the Treasury of revenue. Under-declaration of revenue on annual returns, according to the PACRA Fee Chart for the period August, 2015, to December, 2018, companies in sectors, such as banking, insurance and financial services are supposed to declare returns and pay specified fees as outlined in the approved fee structures. However, a review of annual returns for the period under review revealed that 30 companies in the banking, insurance and financial services sectors had under-declared annual returns by K44,749,” the Report revealed.
It stated that there was equally missing information of clients.
“Missing information on client master data – contact details, according to Section 28. (1) of the Companies Act of 2017, a company shall have a registered office in Zambia to which all communications and notices may be addressed. In addition, Section 14 (1) (d) states that where an applicant meets the requirements of this Act, the Registrar shall within five days assign a designating number to the company as its registration number. However, a review of the active clients on the client master data in ePacra revealed that information, such as registration numbers for 16 clients and the addresses of registered offices for 17,082 clients were missing from the system. This may result in the failure to trace the companies,” it stated.
Meanwhile, the Report stated that the Agency may lose the land they had purchased in Chinsali District due to failure to acquire a title deed.
“The Lands Act No. 29 of 1995 requires that institutions or individuals owning land should have or possess title deeds as proof of ownership. On 12th May, 2015, PACRA purchased a piece of land in Chinsali, Muchinga Province, from Chinsali Municipal Council at K11,000 with a view to constructing the Provincial Office. However, as at 31st December, 2019, PACRA had not acquired title for the land. The lack of title deeds may result in loss of property,” stated the Report.