SECRETARY to the Treasury Fredson Yamba yesterday had a hard time explaining to members of the Parliamentary Public Accounts Committee (PAC) why he gave retrospective authority to the Ministry of Health controlling officer to disburse resources outside the provisions of the Public Financial Management Act.

Meanwhile, Yamba says the Ministry of Finance has established that the MoH finance director engaged in financial misconduct and he would appear before a disciplinary hearing next week.

Speaking when he appeared before the committee, Tuesday, Yamba said he gave the authority because he needed to allow the funds to be expended in the account in order to stand as a charge to the public expenditure.

He was responding to Mkushi North PF member of parliament Doreen Mwape who wanted to find out why retrospective authority was granted on the transfer of funds from the treasury single account to a Ministry of Health emergency account.

“With regard to the treasury authority that was granted, this was done under provision 7(1)(g) and I must mention that when we looked at the issues, what we discovered was that we needed to ensure that this fund for the Ministry of Health had been expended and therefore the retrospective authority was to allow the funds to be expended in the account to stand as a charge to the public expenditure. Chair, I must mention that this is in line with one of the functions that is prescribed in the public finance management act where it is stated that the Secretary to the Treasury may, after looking at the reasons, carry out any functions that will actually help the proper financial management of the finances. So without giving the retrospective authority, what was going to happen later on is that it was going to be difficult to charge these funds to the government expenditure so it’s on that basis that retrospective authority was given,” Yamba said.

But Committee Chairperson Howard Kunda wondered why Yamba had earlier denied to grant authority only to change his mind after the money was already moved.

Supplementing Kunda’s questions, Kasempa UPND member of parliament Brenda Tambatamba asked whether Yamba felt powerless by endorsing the controlling officer’s wrong.

In response, Yamba said the rationale which was used was to allow expenditure and not to encourage any wrong as the money was accounted for.

“We need to go back to the drawing board Honorable members of the committee. First of all, with regard to the movement of the moneys in the emergency response account that was held at the Capital Bank, what we realised later on after interrogating the issue was that there was already a movement of money and this money had moved, yes, it had moved without authority and if we did not give that authority, then it wasn’t going to remain like I said earlier on, in charge of the public expenditure. So that was the rationale that was used, there was nothing like trying to encourage a wrong but to actually ensure that there is, the expenditure was done and this expenditure, despite that omission, is money that can be corrected when it comes to accounting for it,” Yamba said.

He said given the speed at which MoH was moving, the Secretary to the Treasury found their rationale appropriate as they were trying to save lives despite the omission.

“With regard to the failure to adhere to adhere to the COVID-19 circular, again we did realise Ministry of Health had moved, what I would call at a lightning speed, to do certain issues. So when we sat that committee and interrogated them, we found that the rationale they gave was appropriate and in our view again invoking the provision of the public finance management act, section 7, we thought that it was reasonable we could give them this authority because what they were attempting to do, or what they had done was to try and save lives but with of course some omission. So that was the thinking at that time, there was nothing like we had pressure or we thought that we wanted to cover up wrongs but it was on the basis after hearing their submission that what they were trying to do was to save lives and by so doing, they had made one, two omissions,” he said.

Milengi PF member of parliament Mwansa Mbulakulima, however, questioned why Yamba endorsed the wrong as it would have been averted if he stood strong and refused to be used as a rubber stamp on the matter.

In response, Yamba said he was not supporting the fraud and the disciplinary committee was going to be constituted to deal with irregularities which were reported.

“First of all, I must mention that the main purpose of giving the retrospective authority was to recognise the expenditure that was incurred then like I said, I was referring to section 7 of the PFMA, but with regard now that there were omissions that were done, like I mentioned it, we are reconstituting the disciplinary committee, now [to] deal with those financial misconducts that arise. So, we are not supporting, I as ST, I am not supporting the fraud or whatever financial indiscipline that occurred, all that we did was to recognise that yes there was expenditure and we shall interrogate now how the abuse was done and mete out the punishment if it was in the process of the same or other things that have been highlighted as the public accounts committee as commissions by the director finance and other players. So we are still moving but I must mention that this was to allow for the funds to be expended to stand as a charge to the public expenditure that’s why the retrospective authority was done,” he insisted.

Chavuma UPND member of parliament Victor Lumayi further questioned whether the director of finance at the Ministry was vindicated since he acted with authority from Yamba’s office to which Yamba responded by saying the finance director was not vindicated as there were other things that were done wrong and he should be punished accordingly.

“I don’t think the director finance has been vindicated because I gave retrospective authority. Like I mentioned earlier on, this is to allow the accounts to stand as a charge to the public expenditure. Now, in their omissions, there are other things which the director finance did which do not confirm in the financial irregularities that means the financial director must be punished accordingly because we did not give authority that there should be abuse of public funds or there should be fraud or theft of public funds, I don’t think the authority was given in that fashion. Chair, I submit,” Yamba said.

And on the K2.4 billion COVID-19 related debt, Mbulakulima and Kunda asked what plans were in place to manage it to which Yamba responded by saying controller of internal audit would be sent to verify the figure after which a payment plan would be formulated.

“Chair, with regard to the K2.4 billion that has been accumulated, we are going to send in the controller of internal audit to verify the authenticity of that bill and thereafter make a recommendation on what action to take. I must mention to the Honorable committee that it’s not all what is said that is paid in government, we normally have to verify whether these things are real and a number of issues have come out here, over pricing and so forth, not following correct procedure, so until the internal auditor has done the verification, that’s when we shall be able to determine the actual amount that is owing. So Chair, that will be done and thereafter we can come up with a payment plan. I submit,” Yamba explained.

Meanwhile, Yamba said disciplinary sittings would start next week and all officers found wanting would be dealt with.

“With regards to over commitment by the then controlling officer which was a serious omission and you have seen the action that was taken by government, Chair, I must mention that also the other officers who presided over this transaction are also going to go through the same disciplinary [process]. Like I said, we are starting our sittings next week on Thursday and I must mention to the committee that we could have started far much earlier because we had yourselves as the Public Accounts Committee sitting and we did not want to disrupt what was going on. We shall move and deal with it in the manner that we are supposed to do in line with the PFMA, hear them out and make a decision and then we will move forward,” he added.

“With regard to the financial director, you are right Chair that in our dealings, we did not deal with the financial director but however, I must mention to this committee that we will be having a sitting by Thursday and we will be looking at the issues related to the director of finance because we have noticed or we have established that there was financial misconduct with regard to the actions taken by the director of finance. So we shall again avail that information once we have dealt with the issue on the action that we are going to take against the director of finance.”

And when asked to explain why the MoH internal auditor was side-lined in the transactions, Controller of Internal Audit Chibwe Mulonda said a lot had changed since the new auditor was attached to the Ministry as all payments were going through internal audit.

“We received that report of being impeded to carry out our work and what we realised was that because previously, the levelling management for internal audit was up to principal internal auditor, so to address that situation, we thought of raising the profile in terms hierarchy. So we had to second or rather to attach a director of internal audit from the Ministry of Finance because if the treasury authority which we don’t have at the Ministry of Health, so the only way we could go round it was to attach a director from the Ministry of Finance to Ministry of Health director. And since he has gone there, most of the things have actually changed like before he went there, the pre audit wasn’t being done but upon him getting there, every payment is going through internal audit, is being pre audited. I submit Chair,” said Mulonda.

“Chair, our role is to carry out audit functions and at the ministry level when we are carrying out audit functions, out reporting structure is to the controlling officer so if the controlling officer is not giving us the leverage to carry out our work, transactions will pass minus the internal auditor knowing what is happening.”

Auditor General Dick Sichembe, however, said his office had earlier received a report from the internal auditors saying all was well at the ministry.

“Thank you Chair, we just want to clarify one issue which the committee and the listeners should be able to know. We have got in possession of the report where internal auditors, which indicates that they had commissioned the audit of the COVID-19 utilisation of funds. And in that report, which we have, it was commissioned by the very team which was there. Mr Chibwe, one thing that he did not explain is that he is new and the director who has been sent to Ministry of Health is new but the ones who were there before and the ones who were at Ministry of Finance before, they issued a report which was giving a clean slate at Ministry of Health. When we looked at that report, when we started doing our audit, we realised that the audit was not well done so we didn’t rely on that report then we had to start from scratch but according to the standard, some of the things, we use the report of internal auditors but the team which was there then, they commissioned the audit and the report is there and we have got it in our possession which indicates that everything was okay at Ministry of Health,” said Sichembe.