TRANSPARENCY International Zambia (TI-Z) has demanded a full probe into the misapplication of COVID-19 funds and that stern action should be taken against perpetrators.
Commenting on the recent Interim Auditor General’s Report on the audit of utilisation of COVID-19 resources which indicated that K1.3 billion was mismanaged, TI-Z chapter president Rueben Lifuka, in a statement, stated that the continued mismanagement of funds was symptomatic of the rising levels of impropriety and impunity in the management of public affairs.
He stated that it was disappointing that times of emergencies such as COVID-19 presented opportunities for people with ill intentions to engage in corruption and general abuse of resources.
“The Interim Report of the Auditor General on the audit of utilisation of COVID-19 resources as at 31 July 2020, clearly makes for very sad reading and is a serious indictment on failure of systems and procedures in Zambia. This is symptomatic of the rising levels of impropriety and impunity in the management of public affairs. As Transparency International Zambia (TIZ), we are not in the least surprised by this development and as early as April 2020, when the government of Zambia’s official response was taking shape, TI-Z emphasized the need to ensure that principles of good financial management were adhered to, not just in terms of funds being donated, but aid in kind as well,” Lifuka stated.
”We sounded a timely warning of the potential of such donations being abused and we recommended that government puts in place a mechanism to fully account for each and every donation received. Our advice was premised on history, we recall that following the unfortunate gutting of the Lusaka City Market, the corporate world and individuals made generous contributions towards the rebuilding of the said market which still remains incomplete to this day. History has indeed taught us that times of emergencies such as COVID-19 present opportunities for people with ill intentions to engage in corruption and general abuse of resources because of the tendency to shortcut established processes, guidelines and procedures in a bid to respond in a timely manner to the emergency.”
He said the Interim Report of the Auditor General raised important findings which should be urgently addressed and further called on the Anti-Corruption Commission and the Zambia Police Service to take keen interest in the matter and institute their own investigations.
“TI-Z therefore demands that a full investigation be instituted by all Ministries and departments involved in managing the COVID funds, and that all culprits that are involved in this blatant theft of the country’s much needed resources be prosecuted to the fullest extent of the law. We have in the past observed a reluctance by the authorities to deal decisively with such revelations made by the Auditor General. Our hope is that these revelations on the COVID funds will mark the beginning of decisive action that will help bring to an end the theft and abuse of public resources. In this vein, we also call upon the Anti-Corruption Commission and the Zambia Police Service to take keen interest in this matter and institute their own investigations,” Lifuka stated.
He stated that it was disheartening that government had failed to operationalize the National Disaster Relief 10 years after the enactment of the Disaster Management Act of 2010.
“TI-Z would like to remind all stakeholders that as recently as two weeks ago on 16 th October 2020, we released the findings of a project we implemented with the support of the National Democratic Institute (NDI), which tracked the management of financial and material donations made towards Zambia’s COVID-19 response. Two of our findings pointed to poor coordination mechanisms among different government institutions involved in the COVID-19 response; and weak tracking and record keeping systems within the COVID-19 response resource management mechanism. We also highlighted our fear that those inadequacies were potential loopholes through which people with ill intentions could engage in corrupt practices and general abuse of the COVID resources,” Lifuka stated.
“While not entirely surprising to us, it saddens us that the Auditor General’s COVID-19 report has proved our fears correct. The Interim Report of the Auditor General raises important findings which should be urgently addressed. We highlight a number of our concerns arising from this report: The failure to operationalize the National Disaster Relief Trust Fund, 10 years after the enactment of the Disaster Management Act of 2010, is a serious omission and needs to be urgently rectified. Such a Fund, if it was operationalized, should have been the vehicle for mobilizing and coordinating the receipt of funds and donations for the COVID 19 response. Government should urgently set this fund and provide for a better system of managing COVID 19 donations and support grants.”
He stated that TI-Z was concerned with the reported weaknesses in the accountability of COVID 19 resources and lack of adherence to the Public Finance Management Act.
“‘We are concerned with the reported weaknesses in accountability of COVID 19 resources and clearly unscrupulous individuals have taken advantage of the loopholes in the system. From the Auditor General’s report, we have identified that between February and July 2020, Zambia has had a total of about K6.8 billion which includes cash, pledges, commitments and aid-kind donations with the largest amount K6,399,286,226 coming in form of pledges and commitments from bilateral and multilateral organisations. This is a lot of support which needs to be well accounted for and we note with concern that the biggest recipient of this support- the Ministry of Health is the one also cited for the most indiscretions and irregularities. Similarly, the Disaster Management and Mitigation Unit has been mentioned for a number of lapses,” Lifuka stated.
“We are concerned by the apparent lack of adherence to the Public Finance Management Act No 1 of 2018 particularly by the Ministry of Health. It certainly does not augur well for MoH when the Auditor General highlights that contrary to the provision of the Act and the Circular, the Ministry of Health transferred K60,884,345 which it received from the Treasury Single Account (TSA) to a bank account held at First Capital Bank, without approval from the Secretary to Treasury. There was no explanation as to why the Ministry had moved the GRZ funds from the Treasury Single Account at Bank of Zambia into a bank account that had been opened for Donor Funds at a commercial bank. What is even of great concern is that while MoH sought authority from Secretary to the Treasury, this request was later rejected. We want to know what actions have been taken against the Controlling Officer and all other officials at MoH who made this decision without prior approval.”
He stated that it was unacceptable that the Ministry of Health over committed expenditure on government by K63,783,528.
“As TI Z, we are concerned about the lack of financial stewardship and find it unacceptable that the Ministry of Health over committed expenditure on government by K63,783,528. MoH engaged 100 suppliers to supply various medical items to be used in the fight against the COVID -19 pandemic at a total cost of K779,783,529 and the total contracts entered into by the Ministry of Health exceeded the overall total budget provision of K716,000,000 (K659,000,000 – Multi-Sectoral Contingency and Response Plan and K57,000,000 – Epidemic Preparedness Fund),” Lifuka stated.
“There has to be a logical conclusion to this otherwise such actions lend weight to the speculation that over commitment of expenditure on government was deliberate. While we acknowledge we have a pandemic to deal with, this should not be justification for such reckless expenditure particularly that this country is facing many economic challenges. A question still needs to be answered why was there this over commitment and what will be done to redress this.”
Lifuka stated that the lack of discipline at the Ministry of Health, DMMU and other entities involved in the procurement process during this COVID-19 period should be urgently addressed.
“The lack of adherence to Public Procurement regulations is another matter of concern and we see gross abuse all in the name of emergency procurements. We find it difficult to find reasons for some of the single sourcing cited by the Auditor General or tenders that lack competition or cover bidding. The lack of discipline in MoH, DMMU and other entities involved in the procurement process during this COVID 19 period should be urgently addressed. We cannot allow a situation where a few greedy people profit from emergency procurement to the detriment of millions of Zambians. We need answers to all these matters pertaining to procurement and if anything we strongly recommend that the procurement function for COVID19 should be removed from the Ministry of Health in order to stop these malpractices. The Ministry has not demonstrated capability to correctly handle public procurement and it will be unjust to allow it to continue with this function,” Lifuka stated.
He called on the Secretary to Cabinet and Secretary to Treasury to take action against the blatant disregard for public circulars which were meant to guide the manner that public servants managed public resources.
“We call on the Secretary to Cabinet and Secretary to Treasury to action against the blatant disregard for the public circulars which are meant to guide the manner that public servants should manage and account for public resources pertaining to COVID 19. We are concerned to read that COVID 19 funds are used to pay daily subsistence allowances and other allowances for workshops, meetings etc. We further note how fuel is procured and utilized without necessary documentation by some public entities. It is worrying to see the impunity and lack of adherence to public financial regulations by different public officers. We cannot turn a serious pandemic like COVID 19 into a looting spree. There has to be some order and government has no option but to stop this abuse,” stated Lifuka.
“The Auditor General points to weaknesses in the handling of non-cash items at the Disaster Management and Mitigation Unit (DMMU). It is reported that DMMU lacked criteria in the handling and distribution of donated items. The Unit had no written down procedures to be used in the distribution of donated items. Further DMMU had no mechanism in place to ensure that donations by various stakeholders made in the Provinces were reported to headquarters for consolidation. As such the completeness of materials donated could not be verified. We have also not forgotten that the Disaster Management and Mitigation Unit (DMMU) National Coordinator Mr. Chanda Kabwe refuted the findings of our NDI project and insisted that there was transparency in the COVID donations, implying that there would be no possibility of mismanagement occurring. We will be interested in hearing what he now has to say in the wake of the Auditor General’s revelations.”