THE Auditor General’s Report has revealed that the Lusaka South Multi-Facility Economic Zone Limited (LS-MFEZ) allocated fuel worth K105,478 to a non-runner vehicle.
And the Report disclosed that the company recruited an unqualified lawyer in the position of Company Secretary which resulted in paying K185,600 to a law firm as legal fees for services which would have been provided by the employee.
According to the Auditor General’s Report on the Accounts of Parastatal Bodies and other statutory institutions for the financial year ended December 31,2018, the company’s fuel statements revealed that one of the motor vehicles was a non-runner yet the fuel card for the vehicle was active.
“During the period under review, there were four motor vehicles which were allocated fuel cards for refuelling. A scrutiny of the fuel statements revealed that one of the motor vehicles (GRZ 946 BR) was a non-runner yet the fuel card for the vehicle was active and fuel in amounts totalling K105,478 had been irregularly drawn from January 2016 to December 2018,” the Report disclosed.
The report said payments totalling K238,181 were made but were not supported by documents such as receipts.
“Contrary to financial regulation No.45 and 52, 22 payments in amounts totalling K238,181 made during the period under review were not supported with documents such as receipts and invoices. Consequently, the authenticity of the payments could not be ascertained” read the report.
The Report further revealed that the Company paid K1,230,291 to the Zambia National Service to construct gravel roads but the work had been abandoned.
“On 5th June 2017, Lusaka South Multi-Facility Economic Zone Limited engaged ZNS to construct 39 kilometres of gravel roads in the Lusaka South Multi-Facility Economic Zone at the contract sum of K2,795,992 with a completion period of eight months commencing 19th June 2017 and ending 17th February 2018. The scope of works included clearing and grabbing, gravelling and compacting. As at 31st December 2019, amounts totalling K1,230,291 had been paid to the contractor. A physical inspection carried out in August 2019 revealed that the contractor had abandoned works after only working on a 6.5 km stretch and had demobilised,” the Report disclosed.
Meanwhile, the report stated that the Company Secretary was not among the shortlisted candidates.
“During the period under review, LS-MFEZ engaged a consultant to recruit a Company Secretary. According to the prerequisites for the position of Company Secretary, the eligible candidate was to have a minimum of seven years relevant post qualification experience in a reputable organisation of which three years should have been at senior level, should have been an advocate of the High Court and Supreme Court of Zambia with at least five years at the bar and a member of the Law Association of Zambia among others. However, the officer who was recruited for the position did not qualify as she did not meet the above pre-requisites and was not among the shortlisted candidates. As a result, the company engaged and paid amounts totalling K185,600 to a legal firm for 44 provisions of legal services which should have been provided by the Company Secretary,” it stated.
The Report said from 2016, the company did not have a stipulated tenure for the Board of directors which resulted in lack of consistent strategic direction and oversight.
“An examination of financial and other records maintained at the LS-MFEZ for the period from 1st January 2016 to 31st December 2018 revealed the following: the LS-MFEZ did not have a stipulated tenure of office for the Board of Directors from its inception in 2012. During the period from 2013 to 2018, the company had four sets of Board of Directors serving for periods ranging from three months to three years. Consequently, there was a lack of consistent strategic direction and oversight of the company. As at 31st December 2019, the Board had not been appointed,” the Report disclosed.
Meanwhile, the Report said there was issuance of irregular discounts offered to residential plot buyers.
“On 10th September 2018, the Permanent Secretary in the Ministry of Commerce, Trade and Industry approved the sale of 275 residential plots at the recommended price of K100 and K200 per square metre plus a service fee of K50,000 and a 10 percent discount on cash payment. A review of records revealed that a plot in phase one was offered at a sum of K182,600 of which the first instalment of K91,300 was paid on 14th December 2018 while the second instalment of K73,040 was paid on 15th January 2019. Contrary to the 43 provisions in the letter of offer which allowed a 10 percent discount on cash payment, the purchaser was granted a 10 percent discount of K18,260 upon the payment of the second instalment of K73,040 which was made one month after the initial payment resulting in issuance of irregular discount.” stated the Report.