THE Auditor General has revealed that over K700,000 was irregularly paid to the North Western Water Supply and Sewerage Company Limited (NWWSSC) managing director and director finance as long service allowance.
And the Auditor General has revealed that the utility owed over K11 million in statutory obligations and penalties in the form of Pay As You Earn (PAYE) and Pension Contributions to the Zambia Revenue Authority (ZRA) and National Pension Scheme Authority (NAPSA).
According to the Auditor General’s report on the accounts of water and sanitation companies, the payments made to the managing director and director finance were not part of their entitlements as they were on renewable contracts.
“Irregular Payment of Long Service Bonus During the period under review, long service bonus in amounts totalling K720,139 were paid to the Managing Director (K481,568) and the Director Finance (K238,571). However, a review of contracts for the officers revealed that the officers were engaged on three (3) years renewable contracts and were therefore not entitled to long service bonus, rendering the payments irregular,” the report read.
The report also stated that the water utility paid for the managing director’s internet services in amounts totalling K18,108 when it was not part of his contract.
“Irregular Payment of Internet Service In 2018, payments in amounts totalling K18,108 were made to service providers for internet services at the Managing Director’s residence. However, a review of the Managing Director’s conditions of service revealed that he was not entitled to internet services rendering the payments irregular,” read the report.
The report further revealed some irregularities linked to a personal loan contracted by the managing director.
“Questionable Payment of Interest on the Managing Directors’ Loan On 14th September 2015, the Board authorised the Managing Director to obtain a personal loan of K200,000 from a commercial bank as payment towards his outstanding gratuity of K200,000 which was due on 1st March 2015 after expiry of his three-year contract. The following conditions applied on the loan: The loan was secured against outstanding gratuity of K200,000 for the Managing Director; NWWSSCL was to service the loan until it was fully paid. However, the following were observed: On 25th January 2016, the company refunded the Managing Director expenses in amounts totalling K13,000 relating to loan arrangement fees (K6,000), facility fees (K6,000) and registration and legal fees (K1,000) which were charged by the bank while arranging for the loan; Out of a total loan repayable amount of K383,898, an amount of K183,898 representing 92% of the loan amount of K200,000 relating to interest and other expenses was borne by NWWSSCL. The payment of interest of K183,898 in excess of the outstanding gratuity amount of K200,000 which was due to the Managing Director was questionable,” the report revealed.
The report further revealed that there was K39,505 which was stolen from the assistant accountant which was yet to be recovered.
“Financial Regulation No. 86 defines accountable imprest as imprest issued to facilitate the purchase of goods and services whose value cannot be ascertained at the time of issue. During the period under review, imprest in amounts totalling K1,201,488 was issued to twenty-six (26) officers to procure goods and services such as stationery, building materials and service of motor vehicles whose values could have been determined before procuring them. Included in the K1,201,488 was imprest in amounts totalling K41,005 issued on 30th August 2016 (K27,524) and 30th August 2016 (K13,481) in the name of the Assistant Accountant, to procure stationery, pay casual workers and other office expenses. However, an amount of K39,505 from the K41,005 was reported to have been stolen on 7th September 2016 from the Assistant Accountant at Kyawama Market seven (7) days after the money had been withdrawn. Although the matter was reported to the Police, as at 31st December 2019, the funds had not been recovered resulting in a loss of K39,505,” it revealed.
The report also noted that the utility spent K106,389 on five officers to travel abroad in 2016 and 2018 without authority from the permanent secretary in the Ministry of Water Development, Sanitation and Environmental Protection.
The utility is also reported to have failed to act against defaulting customers after an accumulation of K11,648,792 in bills for 1,446 accounts as at 31st December 2019.
The report also revealed that the company was operating at a coverage rate of between 19 to 22 percent leaving a substantial amount of customers without access to sanitation services.
“Sanitation Coverage is the proportion of urban population with access to sanitation services. However, a review of the sector report revealed that the Company was operating at a coverage of between 19% and 22% which was below the sector benchmark of 80%. As a result, a substantial number of households did not have access to sanitation services, thus compromising public health,” read the report.
The report also revealed that the company, as at 31st December 2019, was owing a total amount of K11,193,377 in statutory obligations and penalties in the form PAYE (K7,094,594) and Pension Contributions to NAPSA (K4,098,783) contrary to the Income Tax Act Chapter 323 of the Laws of Zambia.