MINISTRY of Transport and Logistics acting Permanent Secretary Stephen Mbewe has apologised for not following the right procedure in a procurement process in which a supplier was paid a full amount of K46,000 but failed to deliver any equipment.
And Mbewe has admitted that officers in the Ministry of Transport and Logistics still need to be trained in terms of contract management in order to avoid wasteful expenditure.
Speaking when he appeared before the Public Accounts Committee, Monday, Mbewe said he would ensure that the Ministry followed through the different processes required in the management of contracts.
“I share the committee’s concerns. The issue of the failure to manage the contract within the Ministry has been observed. For two years we have actually trained most of the Directors and assistant Directors with regards to contract management but I still agree that even with that, there are still areas where some improvements are required. All I can do is apologise at the moment. The main issue is to constantly try and keep everyone following through the different processes that are required in the management of contracts within the Ministry. The failure to provide documentation, again I apologise to both the Auditor General’s office and to the committee. It was an oversight on our part and we could have done far much better. We could have gotten the documents within the time the audit was going on,” he said.
“Over the 100 percent payment without security, it goes without saying that we needed to have the security even before making this commitment. When the matter was brought to our attention, we have tried to engage the contractor. The offer he has given for a solution is doubtful. They are saying a sister company is owed money by the police. It does not give any excuse as to why we made such a commitment without any security. We apologise for those lapses and we will try to recover the funds. We have reported him both to the police and we wrote a letter last week to the Solicitor General to ask for his guidance because we feel the supplier is trying to obtain money without any intents of supply.”
But Chinsali member of parliament Kalalwe Mukosa said the controlling officer needed to answer the questions instead of rushing to apologise.
“Controlling officer, the way you are answering, I feel like you are not addressing the questions. You are asked very simple questions which deserve clear answers but you are rushing into apologising before providing answers. We asked the reason why documentation was not provided at the time of audit and you just apologised. The question is why were you failing to provide documentation?” asked Mukosa.
“Similarly, you were asked why the Ministry agreed on the 100 percent upfront payment without security in case of failure to perform by the contractor as in the current situation. You have just apologised and lamented the same problems that we are seeing. Tell us the reason why those things are happening and do not rush into apologising. We want to [know] why these things are happening at your Ministry.”
In response, Ministry of Transport and Logistics Head of Procurement Memorine Banda admitted that there were omissions in the procurement process.
“The method of procurement that we used was shopping method where you get a minimum of three quotations. The form of contract that is entered into is the local purchase contract. On the quotations, they indicated the delivery and payment terms and being a shopping method, we did not necessarily sit to write any minutes with the supplier. The supplier asked for a 100 percent upfront so that they can deliver. We did engage with them and we indicated to them that we cannot pay a 100 percent,” she said.
“What we can do is just pay something so that when they deliver, we pay the full amount. The time we started the procurement process, we had the funds available but not the amount which was required. The problem that we are having with some suppliers nowadays is that government at large is taking too long to pay them so they are also seeking not to supply until we pay something or a full payment. I admit it was an omission on our part and going forward we have resolved that whatever payment that is going to be made, we shall secure the funds. Whatever we procure, will only be paid after delivery. There is a system that is followed.”
Meanwhile, nominated member of parliament Likando Mufalali expressed concern that the controlling officer and his team were not giving concrete answers.
“I think we are not here for jokes or games but we are here for serious business. I think this committee wants concrete answers but what you are giving us so far is something that is not reasonable. The money involved is quite huge and you are coming to this committee to tell us that the procurement officers went round shopping but did they see the equipment they were looking for? If they saw the equipment they were looking for why didn’t they collect it upon payment? You do not seem to have the background of the supplier but you gave him money,” he said.
“I am wondering why you are even still seated there because you were not supposed to make that payment. Who influenced you to give that money out? Is that how you will be doing things in that Ministry? The business as usual has ended where people come here and say sorry. Unfortunately, I think we are not going to accept flaws to the system to allow the controlling officer to come with apologies. We want answers and the right people to appear before this committee. This sorry thing will not do and people must pay.”
Kantanshi member of parliament Anthony Mumba said the Ministry of Transport and Logistics did not seem to respect the obligations contained in the contracts.
“I get the feeling that we seem not to be respecting the obligations that are subscribed in the contracts. There is no government contract where you just wake up and say I am going to pay 100 percent. Why didn’t the Ministry follow the prescribed system? It is simple and if you do not follow the system, there is no way finance will pay because audit would have denied, there should be no oversight because that is why there is a system. You are trying to plead that there was an oversight at the expense of the Zambian people getting their services on time. So why were the systems not followed?” Mumba asked.
But Ministry of Transport and Logistics Head of Internal Audit Fidelis Tembo expressed ignorance on the matter.
“On internal controls, I think in my view internal controls as a Ministry we have maintained them and we are doing our level best. On this particular case, I wonder the procedures were not properly followed. In my view, this query has been there and the procurement has done its homework as well as audit. I am not running away from the fact that this was raised and it was not actually supplied. I am at pains Chair, to go on stating because this was actually being responded to and as I came here I never expected that it would be addressed,” he said.
Meanwhile, PAC chairperson Warren Mwambazi directed the controlling officer to give answers as required by the committee.
“I am also as chair finding it a bit difficult because some of the things I think we are leaving them and moving on minus concluding. First and foremost, we as a committee want answers. Maybe just to bring this to your attention, this committee is not going to take these things as just business as usual. We have got previous recommendations which are also appearing here as part of your answers and if anything we are going to make sure that we enforce the recommendations of what was agreed by the previous committee because we want controlling officers and their staff to follow procedure. We want to see change and improvement in the civil service. We have got incompetent officers who are derailing the plans for development. So controlling officer, there are a lot of issues in your submission of which are outstanding,” said Mwambazi.