Auditor General reveals K1.6 million salary, leave pay irregularities at IDC

The Industrial Development Corporation (IDC) awarded unsupported leave pay to selected employees exceeding K1.4 million during its financial year ending December 31, 2017, while irregular salary increments to some staff hit over K154,000

And several contracts at the National Road Fund Agency (NRFA) were cancelled after its inability to pay outstanding sums on road projects.

Meanwhile, Avic International has abandoned construction works at the Choma and Kafulafuta toll plazas due to NRFA’s failure to pay the outstanding balance of the contract sum.

According to the report of the Auditor General on the Accounts of Parastatal Bodies and other statutory institutions for the financial year ended December 31, 2017, 10 officers at the IDC received irregular salary increments totalling K154,776 without the necessary performance management appraisals, while some staff got paid over K1.4 million in unsupported leave payments.

The IDC is a State-Owned Enterprise (SOE) charged with the mandate to spearhead government’s investments agenda aimed at strengthening Zambia’s industrial base and job creation.

“Terms and conditions of service for IDC No. 10 states that an employee’s salary shall be reviewed annually in line with the Performance Management Appraisal System (PMAS) and implemented from January 1. However, on January 16, 2017, the Manager, Human Resources and Administration made a proposal to the Chief Executive Officer, for notch increment for 10 officers without carrying out performance management appraisals,” the AG’s Report revealed.

“In this regard, salary increments in amounts totalling K154,776 paid to the officers in 2017 were irregular.”

The Report also cited 12 unsupported payments totalling K72,801 made during the period under review, while unsupported leave pay of over K1.4 million, was paid out to various officers.

“Terms and conditions of service for IDC No. 12 provides guidance on the types of leave and when an individual is entitled to leave. An examination of the payroll records reveal that during the period under review, amounts totalling K1,415,383 were paid to various officers as leave pay. However, approved leave forms were not availed for audit,” the report disclosed.

The IDC was also found to have inadequate staffing levels despite having 32 positions vacant as at the end of its financial year ending December 31, 2017, while the SOE equally failed to produce an annual report for the same period under review as at December 31, 2018.

And the AG’s Report revealed that several contracts at the NRFA were cancelled with contractors after its inability to pay outstanding sums on road projects.

As at November, 2018, there were 139 signed contracts for road infrastructure and related projects countrywide.

But data contained in the Report revealed that five major contracts, including the Kalabo-Sikongo road project by Steffanuti Stocks, were either suspended or terminated due to insufficient funding to honour the signed contractual agreements.

“These contracts were signed between contractors for works, supervising consultants and the Road Development Agency. It was, however, observed that, as at November, 2018, NRFA had only managed to pay K1,230,721,923 to various contractors and consultants out of the certified interim payment certificates and fee notes valued at K12,140,479,049 (K11,341,277,405 owed to contractors and K799,201,644 owed to consultants). This translated to only paying 10.14 per cent of certified works and consultancy,” it narrated.

“In addition, as a result of the delay in paying contractors on time, some contractors had suspended or terminated contracts with RDA.”

Meanwhile, the Choma and Kafulafuta toll plazas have stalled due to the NRFA failing to honour its commitments in paying up the contractors on-site, leaving works abandoned.

“On 10th July, 2017, the RDA engaged AVIC International Zambia Limited for the construction of the Michael Chilufya Sata, Choma and Kafulafuta Toll Plazas at a total cost of K120,510,272 (US $12,051,027.20) with a completion period of seven months. As at October, 2018, the contractor had claimed an amount of K31,860,090 (US $3,186,009) on certified works out of which amounts totalling K23,268,040 (US $2,326,804) had been paid, leaving a balance of K8,412,050 (US $841,205). Consequently, the contractor abandoned works at Choma and Kafulafuta toll plazas,” revealed the AG’s Report.

         

Stuart Lisulo

About Stuart Lisulo

Stuart Lisulo is an experienced Zambian journalist with a focus on business news.
Email: stuart [at] diggers [dot] news

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Robby Mutale
Robby Mutale

It is shameful that news is only when those tasked to manage the public service steal public funds.

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