THE Auditor General’s report on the accounts of Parastatal Bodies and other statutory institutions for the financial year ended 31st December 2018 has revealed that parastatal bodies failed to remit statutory obligations of K3.4 billion.
In a statement issued by Auditor General’s office head of public relations Ellen Chikale, the office issued four audit reports which have since been tabled in Parliament of which two were regularity audits and two were performance audits.
The report revealed that the University of Zambia accounted for K2.7 billion, about 81 percent of the K3.4 billion not remitted to ZRA, while Nitrogen Chemicals of Zambia accounted for 14 percent K465 million Kwacha.
“The report has highlighted failure to settle or remit statutory obligations as the highest irregularity at K3.4 billion. The implication for this irregularity is loss of revenue to government in the case of non-remittances to ZRA and risk of failing to pay employees when they retire in case of NAPSA and Workers Compensation Fund Control Board. Notable institutions are the University of Zambia accounted for 81% (K2.7 billion) and Nitrogen Chemicals of Zambia accounted for 14% (K465 million),” Chikale stated.
“The report also revealed that three out of the 16 institutions made questionable payments in amounts totalling K1,247,162. The circumstances included continued payments based on expired contracts, insurance claims paid to officers instead of the institution which insured the assets. Further, four out of the 16 institutions made irregular payments in amounts totalling K4,652,035. The circumstances included payments to officers under the Judiciary who had resigned, dismissed, and those whose contracts were terminated; at Nitrogen Chemical of Zambia, commissions were paid to agents without evidence of facilitated sales.”
Chikale stated that the report revealed an overall weakness in corporate governance which resulted in bad decision making.
“Overall, the report has revealed weaknesses in corporate governance which results in bad business decisions. In addition, there were also weaknesses in the implementation of Information Communication Technology (ICT) systems in some of the audited entities. The implication of this irregularity is the failure to realise the full value of the system which results in pronounced inefficiencies and ineffectiveness in the business processes of the audited entity. The other irregularities highlighted were failure to produce financial statements; Poor financial and operational performance; and Weaknesses in contract management among others,” Chikale stated.
Chikale stated that the Auditor General’s report on the accounts of water and sanitation companies revealed irregularities totalling to K2,641,990,353 on nine water sanitation companies that were audited.
“This Report, which is the first special report of its kind, contains paragraphs on nine out of the eleven 11 Water and Sanitation Companies that were audited and remained with unresolved issues as at 31st December 2019. The report seeks to highlight the role water utilities play in the attainment of Sustainable Development Goal (SDG) No 6, which is Clean Water and Sanitation. The companies audited are Chambeshi, Eastern, Luapula, Lukanga, Lusaka, Nkana, Northwestern, Southern and Western Water and Sanitation Companies. The irregularities observed in the nine water and sanitation companies were in amounts totalling K2,641,990,353. The major ones being Non Revenue Water, poor contract management and poor debt management,” Chikale stated.
“All the nine water and sanitation companies had non-revenue water in amounts totalling K1,405,739,018. Luapula, Lusaka, Nkana, Northwestern and Southern Water and Sanitation Companies accounted for 69% or K963 million. The Non-revenue water entails water that has been produced and distributed but no revenue accrued due to various reasons. Two water and sanitation companies namely, Chambeshi and Northwestern Water and Sanitation Companies failed to secure performance bonds for on-going works with contract sums in amounts totalling K254,347,838. Chambeshi Water and Sanitation Company accounted for 99% or K252 millon.There was also wasteful expenditure at K16 million (K16, 660,814).”
She stated the Audit Report on the preparedness for implementation of Sustainable Development Goals in Zambia revealed that the integration of the 2030 agenda into national development plans was incomplete and that the identification of resources and capacities required for the implementation of the SDGs was incomplete as financial resources had been partially identified.
Chikale further added that there were inadequate mechanisms and systems in place to monitor, review and report progress made towards the implementation of the 2030 Agenda.
“This performance audit report has highlighted the process of how the Government was preparing for the implementation of Sustainable Development Goals (SDGs). Among the notable findings were that: Integration of the 2030 Agenda into national development plans was incomplete; the review and alignment of the SDGs at the sub national and local levels had not been conducted, the structures for policy coherence were not fully operational; and the awareness of the SDGs had not been integrated at the local level. (II) Identification of resources and capacities required for the implementation of the SDGs was incomplete as financial resources had been partially identified; the budgeting had not yet been linked to the SDGs as the link between the national planning and budgeting was weak.The budgeting framework was not result based as Output Based Budgeting(OBB) was only implemented by three ministries and no assessment of human resources and ICT skills had been conducted. The Output Based Budgeting (OBB) system entails that costs are attached to tangible outcomes was not fully implemented as most Ministries had not migrated from Activity based budgeting (ABB) to OBB at the time of audit,” she stated.
“There were inadequate mechanisms and systems in place to monitor, follow up, review and report on progress made towards the implementation of the 2030 Agenda as they were not integrated and coordinated.The structures assigned with the responsibility to monitor and report at the national, sub national and local levels were not fully operational. Data required to measure the SDGs performance indicators to report progress was not readily available. From the foregoing, the purpose of implementing the SDGs whose goal is to ensure that “no one is left behind” could be defeated if the above findings are not adequately addressed.”
Chikale stated that the Performance Audit on the provision of special education in primary schools in Zambia for the period 2014 to 2018 revealed that the Ministry of General Education had not laid out guidelines on infrastructure development on special education and that the Ministry had no specific budget allocated to special education, among other finds.
“The Performance audit was carried out at Ministry of General Education on special education in public primary schools. This Performance Audit report has highlighted Sustainable Development Goals (SDGs) No 4 and 10 that aim to ensure quality education and reduced inequalities, respectively. This report discusses challenges that Learners with special educational needs are facing and makes recommendations on how special education (SE) can be improved. The following are the findings: The Ministry did not have laid out standard guidelines on infrastructure development on special education; the Ministry did not have a specific budget line allocated to special education; health facilities lacked proper screening and identification tools for learners with special education,” stated Chikale.
“Assessment centers for learners with special educational needs were only four, country wide; University Teaching Hospital (UTH), University of Zambia (UNZA), Zambia Institute of Special Education (ZAMISE) and Holy Family in Monze. Learners with special needs in some places had to travel long distances due to inadequate numbers of special schools. The Ministry did not adequately monitor and evaluate special education in the country. As a result of the following, Learners with Special Needs continue to be disadvantaged thus being left behind contrary to the SDG implementation intention of leaving no one behind.”