AN investigations officer at the Anti-Corruption Commission (ACC) has testified that investigations revealed that beneficiaries of the Social Cash Transfer programme was not funded on time as ZAMPOST, which was the payment service provider, would put the funds in a fixed deposit account for some days to earn interest.
Victor Mutantabowa, told the Lusaka Magistrates’ Court that the social cash transfer funds were not paid to beneficiaries within the stipulated 72 hours as ZAMPOST would put these funds in a fixed deposit account to earn interest for seven days.
The State witness was testifying in a matter in which former Minister of Community Development and Social Services Emerine Kabanshi is charged with two counts of willful failure to comply with the law and applicable procedure or guidelines relating to procurement involving the Social Cash Transfer programme.
When the matter came up for continued trial before Chief resident magistrate Lameck Mwale, Wednesday, Mutantabowa, who is also the arresting officer, testified that on September 20, 2018, ACC received a report of alleged corrupt practices and mismanagement of a social cash transfer programme under the Ministry of Community Development and Social Services.
He said the allegations was against an officer at the said Ministry and ZAMPOST.
Mutantabowa said to that effect, a joint investigations team was set up comprising himself, another investigations officer at ACC and another from the Drug Enforcement Commission (DEC).
“The joint investigations team set up commenced investigations in September 2018 and extended investigations to the Ministry of Community Development, ZAMPOST and to other entities such as banks and government institutions relevant to the case,” he said.
Mutantabowa said in the process of investigations, evidence was retrieved from the Ministry of Community Development, ZAMPOST and other entities, which was analysed.
He added that the joint investigations team further conducted interviews at the said Ministry, at ZAMPOST and with other key stakeholders in the social cash transfer program such as beneficiaries and the ministry’s district officials in various parts of the country.
Mutantabowa said it was established that there was a contract signed between the Ministry of Community Development and ZAMPOST on August 21, 2017 which was marked as contract number MCDSS/SP/10/2017.
He said the contract signed with ZAMPOST was such that ZAMPOST was going to act as an agent for the Ministry of Community Development in paying social cash transfer on behalf of the Ministry.
Mutantabowa said the contract had some special conditions indicating that ZAMPOST would have among other responsibilities and obligations; to pay beneficiaries of the social cash transfer on behalf of the Ministry in line with instructions received from the ministry in all districts of Luapula and Western Provinces.
“The second one was that ZAMPOST was to manage the process of payments and to ensure that the payments are effected within 72 hours of receipt of funds from the Ministry. ZAMPOST was to also avail monthly reports to the Ministry by the 14 th day of the following month, among others,” he said.
Mutantabowa said disbursement of funds under the social cash transfer program commenced with the first disbursement being for the July/August 2017 circle, the amount being over K29 million.
He added that the said amount included the commission for ZAMPOST of about K2 million.
Mutantabowa further said the disbursement was made by the Ministry of Community Development to ZAMPOST on September 28, 2017 with the scope of coverage being for Luapula and Western Provinces, according to the contract.
He however, said investigations revealed that after the disbursement was made, there were challenges on ZAMPOST’s end in paying the money to the beneficiaries.
Mutantabowa said apart from funds being delayed, some beneficiaries were walking longs distances to get their funds while others could not get the money entitled to them.
“The first challenge was that these funds were delayed. According to the contract, funds were supposed to be paid within 72 hours. However, these funds were not paid within the stipulated time of 72 hours by ZAMPOST. It was established that part of the reason was that ZAMPOST would put these funds in a fixed deposit account to earn interest for seven days,” he said.
“The implication of that, was that the beneficiaries would not receive payment within 72 hours because funds were committed to a fixed deposit account for seven days.”
Mutantabowa said the challenges were brought to the attention of the Ministry, in particular the permanent secretary at that time, Reverend Howard Sikwela.
The witness, however, said that while there were these challenges in executing these payments, the then ZAMPOST Postmaster general McPherson Chanda wrote a letter addressed to Rev Sikwela, advising the PS that ZAMPOST was ready to pay social cash transfer in Northern, Muchinga, North-Western and two districts on the Copperbelt Province namely Mpongwe and Masaiti (Lifwanyama).
Mutantabowa said their investigations further established that when Rev Sikwela received the letter, he met Kabanshi, who was the then Minister of Community Development, to advise her that the said provinces listed were not covered under the scope of contract signed with ZAMPOST.
He however, said according to Rev Sikwela, his (Sikwela’s) advice was not yielded to and he was further directed to proceed to ensure that payment was made to the said provinces.
Mutantabowa said following that meeting, the director for Social Welfare was instructed to allow ZAMPOST to go ahead.
“Honourable Kabanshi instructed the director for Social Welfare to process payment and he was warned that those resisting to effect that instruction will be dealt with as previous directors were dealt with. From our investigations, the previous directors were terminated in national interest because they opposed at one time or the other the engagement of ZAMPOST,” he said.
“After being instructed to proceed to pay to these three Provinces and two districts on the Copperbelt, payment was prepared around December 2017. Funds of about over K69 million were disbursed to ZAMPOST for the September/October, 2017 circle. These funds were for Western, Luapula, Muchinga, North-Western, Northern Province and two districts on the Copperbelt Province. The commission which went to ZAMPOST was over K5 million.”
The witness continues with his testimony today.
Earlier, a Banker at Zambia National Commercial testified that he was not preview on whether Kabanshi was a signatory to the bank account belonging to the Ministry of Community Development held at Zanaco.
Wishikoti Katambi, a banker at Zanaco’s Lusaka Business Center branch testified that on August 27, 2019 he was approached by two officers, one from the ACC and another from DEC who presented a warrant to check the records of the bank’s customer, Ministry of Community Development in regard to the transfers that were performed in 2017.
He said he therefore proceeded to give the officers a bank statement of the transactions recorded on December 14, 2017
“On December 14, 2017, the opening balance (of the account) was K74,971,516.91. There is a debit transfer that was done on this day of an amount of K5,175,225.60. This transfer went to ZAMPOST, (as the) commission. The balance reduced to 69,796,241.31. The second transaction was for K64,690,320, then the balance came to 5,105,875.31. This transaction went to ZAMPOST,” Katambi said.
In cross examination by defence lawyer Jonas Zimba, the witness said there were various signatories to the said account, adding that he was not preview on whether Kabanshi was a signatory to the account.
In this matter, it is alleged that Kabanshi between August 21, 2017 and April 26, 2018 in Lusaka, as a minister concerned in the administration and management at the ministry of Community Development and Social Services, did willfully fail to comply with the law, applicable procedure and guidelines relating to procurement by extending the scope of coverage of contract number MCDSS/SP/10/2017 between ZAMPOST MCDSS to include three provinces and two districts under Social Cash Transfer programme.
In count two, it is alleged that Kabanshi during the same period did willfully fail to comply the law, procedures and guidelines relating to procurement when re-engaging ZAMPOST as payment service provider under contract number MCDSS/10/2017 for Social Cash Transfer programme following the termination of the said contract.