A University of Zambia operational performance review audit for the financial year ended 2018 has revealed that the University of Zambia owes over K621 million in respect of terminal benefits, gratuities, and leave days to 2,815 officers that had either retired or were still in employment as of August 2019.
Meanwhile, the report has revealed that UNZA’s Graduate School of Business director Dr Lubinda Haabazoka was one of two people to get a double payment of a “responsibility allowance”, but UNZA management said this was not illegal as the said officers had performed different functions which entitled them to the allowances.
This is according to a management letter for review of operations signed by Auditor General’s Office Director – Public Debt & Investment Audits, Rinniah Zulu, detailing the findings of an audit on the operations of Zambia’s highest learning institution.
The findings of the preliminary audit revealed that UNZA owed terminal benefits to two deceased officers K419,410.54, two officers who retired on medical grounds K1,297,081.64, 238 living officers were owed K263,778,670.86 while 2,573 officers were owed K355,522,391.54 in contract gratuities and leave days.
“A review of records revealed that, the University owed amounts totalling K621,017,554.58 in respect of terminal benefits, gratuities, and leave days to two thousand eight hundred and fifteen (2,815) officers that had either retired or were still in employment as of August 2019. It was also observed that the University was paying K2,150,279.52 in monthly salaries to the retirees,” read the audit prepared by Grant Thornton.
In its response, management said it was hopeful that government would liquidate the debt as per the Public Universities New Financing Strategy Cabinet memo of 2017.
“The auditor’s observation is noted. Failure to pay terminal benefits as and when they fall due is as a result of liquidity problems. As stated in your analysis, Government funding to the University is below operational costs rendering the University incapacity to dismantle the arrears. However, the University anticipates that most of its debt shall be liquidated by the Government of Zambia as per the Public Universities New Financing Strategy Cabinet memo of 2017. In December 2018 treasury released K23million for dismantling of arrears. In 2019 a total of K20.9 million was released towards dismantling of arrears. Evidence is available for verification,” the report read.
Meanwhile, the report revealed that Dr Haabazoka who is Economics Association of Zambia (EAZ) president, was one of two people who got a double payment of a “responsibility allowance” while two separate officers received the said allowance without letters of appointment to prove they were entitled to such an allowance.
“Section 3(v) of the University of Zambia, Summary Human Resource Management Policies and Procedure manual of 2013, states that all employees appointed as Dean/Directors, Head of Departments and /or Assistant Deans shall be paid a responsibility allowance. The allowance is paid for the administrative duties performed by the staff in addition to the academic responsibilities and the bursar shall effect payment through the payroll. It was observed that on 10th November 2018, amounts totalling K84,443.80 were paid to four (4) officers as responsibility allowances as tabulated below: Lubinda Haabazoka, K33,980.12, Romeo Yohane, K22,523.01, Lawrence Chanda, K17,811.11 and Michael Tembo K10,129.56,” the report read.
“However, it was observed that there was no authority from the Vice Chancellor to proceed with the payments of the responsibility allowances outside the payroll. Further the following irregularities were noted. Double payment of Responsibility allowance; A review of the payroll records for the year under review revealed that, two (20 officers that had been paid amounts totalling K56,503.13 from the table above were also paid a total amount of K174,162.66 as responsibility allowances through the payroll resulting in a double payment of the allowance.”
According to a table in the report, Dr Haabazoka received a second responsibility allowance of K108,337.56 while Yohane was paid K65,825.10.
The report noted that for the other two officers who were paid a responsibility allowance, there was no documentation to prove that they deserved it.
“Contrary to section 3(v) of the University of Zambia, Summary Human Resources Management Policies and Procedures Manual of 2013. Two (2) officers were paid responsibility allowances of K27,940.67 without appointment letters to take up extra duties,” read the report.
The report noted that a review of the payment documents revealed that tax in amounts totalling K50,666.27 was deducted from the officers, however, as of November 2019, the tax had not been remitted to ZRA.
In its response management explained that the two responsibility allowances paid to Dr Haabazoka and his colleague were for two separate functions.
“Responsibility allowances paid to Dr. Lubinda Habaazoka and Romeo Yohane by the School relates to the duties they are discharging on behalf of UNZA GSB Lodge. The Lodge runs as a profitable project and meets its own expenses. The approved project proposal includes the responsibility allowances for the Director and the Accountant. The approved project document is available for verification,” the report read.
“Dr. Lubinda Habaazoka receives a responsibility allowance through the payroll for discharging duties of the Director of Graduate School of Business. He is appointed substantially as a Lecturer and the responsibility allowance compensates for discharging duties of the Director. The responsibility allowance paid to Romeo Yohane relates to the duties discharged after appointed to run an additional office in addition to his substantive post.”
Management also explained why there were no appointment letters for the other two officers.
“The responsibility allowances paid to Lawrence Chanda and Michael Tembo relates to the duties that are discharging on behalf of UNZA GSB Lodge. In the project proposal, the two officers are not included; however, due to the volume of work, they assist in the running of the Lodge. However, the four officers in proportion to their salary scales share the responsibility allowances for Dr. Habaazoka and Mr. Yohane. This has no further monetary implications on the approved project costs,” read the report.
“The delay in paying PAYE was because ZRA refused the GSB Lodge to pay tax using UNZA tax account. On advice of ZRA, GSB lodge has initiated the process of opening a separate tax account. Payment will be made when the account is open. It is projected to finalise the process of opening account by the end of February 2020.”