MINISTRY of Health finance director Daniel Kalangu yesterday came under fire when he failed to convince members of the Parliamentary Public Accounts Committee that the reason why he withdrew K3 million cash from a MoH account as opposed to transferring it to beneficiary accounts was due to an emergency.
As he was interrogated, however, he was forced to apologise after it was established that there was no urgency in the matter because after the money was withdrawn, it took about a week before it was given to beneficiaries.
Meanwhile, Ministry of Health permanent secretary Dr Kennedy Malama admitted that some officers who misappropriated funds should have been charged rather than only being reprimanded and being instructed to “put back” the missing money.
In the interim report on the audit of utilisation of COVID-19 Resources as at July 31, 2020, the Auditor General highlighted that according to the Treasury and Finance Management Circular No. 1 of 2020, controlling officers were guided that no cash shall be withdrawn for payment of subsistence allowances, fuel refunds and any other allowances but “These shall be paid directly into the beneficiary’s bank account.”
Contrary to the Treasury and Finance Management Circular No. 1 of 2020, between 20th March 2020 and 30th May 2020, the Ministry of Health made cash withdrawals in amounts totalling K3,361,196 which were used to pay various allowances and fuel, among others.
Appearing before the committee, Kalangu insisted that he felt that he did the right thing by withdrawing the money but regretted that the provisions of the Act were not followed.
He was responding to Kasempa UPND member of parliament Brenda Tambatamba who wanted him to state whether he was allowed to do things as he thought rather than following stipulated guidelines.
“Chair, I have repeated myself that at that time, yes, in my view we did the correct thing but this is the importance of audit and they came and highlighted this Chair and we have learnt lessons, that’s what I am saying. It’s not that I am standing to say I remain correct but that Chair as I have explained, it was done and we regret that the provisions were not followed. I submit Chair,” he said.
And in response to Senga Hill PF member of parliament Kapembwa Simbao who demanded an explanation as to whether he was aware of what he was supposed to do, Kalangu said the action was regrettable.
“All I can say Chair, is the action is regrettable and that’s why from then when this was highlighted by the Auditor General, I think steps have been taken to correct this Chair. Did I read the Act, yes I did. The Act talks about transferring between banks and I understood that, what for me and which I regret, which I apologise for Chair is that my understanding is that I was transferring this money from Ministry of Finance, the treasury, to the account that is used by the Ministry of Health and to me, especially that the process of collecting this money goes through the Ministry of Finance, so at that time, I thought it was correct and I repeat Chair that this is the importance of audit where we learn where we have made mistakes and this was a mistake, I really apologise for that. I submit,” he said.
And Chinsali PF member of parliament Kalalwe Mukosa asked that since the director of finance had acknowledged wrong doing, what action was the controlling officer going to take against him.
In response permanent secretary in charge of technical services Dr Kennedy Malama said consultations would be made with the office of the Accountant General who is in charge of all accountants in the public service, and guidance would be provided.
When Chavuma UPND member of parliament Victor Lumayi asked why the withdrawal was done when the workshops were conducted in areas that have banks and also why there were no receipts for the money that was paid back by the staff, Malama said MoH was putting in place corrective measures to ensure that such lapses did not recur.
“Indeed the circular number one of 2020, the ministry did receive and we are aware of the contents and the importance of adhering to this circular. Chair, as I stated in my presentation, I regret this development. One of the measures which was made at that time was to ensure that those imprest holders and the coordinators ensured that all those resources which were given in a manner they shouldn’t have been given should be deposited back and that action was taken but Chair suffice to say, that does not cure the lapses which were encountered. It’s difficult Chair to find an appropriate response to give when the audit report is very clear that we could have done better. So just to acknowledge what the honourable members have said and to say these are some of the issues I have mentioned that we are prioritising as a ministry to make sure they do not recur and I am sure director finance agrees with me,” Dr Malama said.
Committee Chairperson Howard Kunda then wondered why the Ministry was not following laid down rules and why they continued to allow anomalies to happen.
In response, Kalangu tried to explain that he had to make the withdraw because time was running out.
“Chair, there was a process, knowing the circular, I know it very well and we have implemented a number of them. For this particular case, if you looked at the time I received the instruction to process this and the time which was effected Chair, it was the period that we were trying to get these details, the bank details from the participants from these provinces. So it became apparent and especially that the pandemic was increasing, it was evolving that the team felt that we were getting late…,” Kalungu said.
But Kunda interrupted him and wondered why he said it was a matter of urgency when a week passed between the time that the money was withdrawn and the time the workshops were conducted.
“Chair, when I did draw these funds, there was that urgency especially that I had delayed this as I demanded for the details and it became very urgent because we didn’t know where this pandemic was going. As to why after drawing, there was again a delay as Chair, you have guided that it took a week or so. I think this was done by very competent people, it was not administrative people but people who were so much in charge…For me, my job was to ensure that I facilitate this work,” Kalangu said.
Kunda then insisted that Kalangu state why he was disregarding the rules.
“There is a question you are not answering, why are you disregarding the rules because if you say it was urgent and it took two days and you needed to give funds as soon as possible, to undertake the matter but it took one week, wouldn’t you have gotten accounts to transfer the money? Why are you saying you did what you could because it was urgent but it took one week, why are you disregarding laid down rules that you are aware of?” asked Kunda.
In response, Kalungu said that he regretted the lapse and apologised.
And when Tambatamba questioned whether the internal auditor was working side by side with the controlling officer and the director of finance, director of internal audits at the ministry George Chibwe said his office was not involved in the transaction.
“Yes Chair, the funds being discussed, at the time they were happening, I think internal audit was not involved, we only came to be aware when we were doing our routine examination of records. I submit Chair,” Chibwe said.
Kunda then asked at which stage he is involved in transactions, Chibwe said he was supposed to be involved before the transaction was done but he was not given an opportunity to have a look at the said payments.
“Chair, in line with the treasury and financial management circular that the office of the secretary to the treasury issued, all payments before they go to any stage were supposed to have a hand and we are supposed to participate but in this regard, internal audit was not given this opportunity to have a look at these payments,” said Chibwe.
But Kalungu, in response to Kunda who asked why internal controls were not regarded, said it was part of the lapses that happened in the transaction.
“Thank you Chair, internal audit is very key and we ensure that before a transfer is done, they are checked by internal audit Chair but in this particular one, in fact it’s after the, this particular one, I think that’s part of the lapses that happened Chair,” said Kalungu.
Meanwhile, Kunda wondered why the controlling officer kept on referring to the fact that coordinators were reprimanded, rather than being charged for some of the irregularities.
In response, Dr Malama said the coordinators were talked to and directed to reimburse the funds that were not accounted for.
“What we meant was they were talked to and directed to ensure that all those resources which were not accounted for are reimbursed or put back. Chair, that’s what we meant, that they were talked to and a directive given to all of them including those who were heading these trainings and those who were the imprest holders to ensure that these resources were put back. Chair I submit,” Dr Malama said.
Kunda, however, wondered why they were only being reprimanded for taking money which did not belong to them.
“PS, it looks like it has been free for all, if it wasn’t for the Auditor General to come and audit these funds, it would have meant that these issues would not have been identified. Where people get more money instead of the actual amount, aren’t they supposed to be responsible seeing that they will have collected more money and would not be told that they got more money and they have to pay back? Why are you reprimanding them? Just to talk to them when they are getting money that does not belong to them?” asked Kunda.
“Don’t you think people should be responsible enough to identify anomalies and not to keep quiet because then, it shows that they are irresponsible.”
In response, Dr Malama said the ministry would review its performance and agreed that a more appropriate action should have been taken against the officers.
“Indeed, that’s how it’s supposed to be. Chair, we didn’t want just to bring to the committee when we realised that the action should have been more than that, we didn’t want to take action and just bring to the committee for the sake of it but even as we are presenting, it’s important that we will need to review our performance including the way that particular transaction was held. And I totally agree with you Honorable Chair that documenting the action which should have been taken at that time is the most appropriate thing to have been done but I acknowledge Chair, that was not done, we will just ensure that in, future we are very ‘formative’ as management when such incidents occur Chair. I submit,” said Dr Malama.