THE National Arts Council (NAC) and the Citizens Economic Empowerment Commission (CEEC) were yesterday sent away by the Public Accounts Committee (PAC) after struggling to explain how over K2.3 million and over K658,000 in loans was disbursed under the artists’ empowerment scheme without following standard procedure.

According to the Auditor General’s report, K658,138 was disbursed as an empowerment loan to three unregistered entities, while over K2.3 million was disbursed to nine beneficiaries without endorsement and approval from the Council.

Speaking during the PAC meeting, Tuesday, independent member of Parliament Likando Mufalali said both CEEC and NAC failed in their duties.

“Chair, I am disappointed with CEEC and NAC. They failed to follow their own procedures which they laid down for themselves. This is a fund management agreement you had and if you are to follow, NAC was not even supposed to be involved and start identifying beneficiaries. This agreement is very clear. CEEC should have had the final say to identify beneficiaries. Unfortunately, CEEC also I do not know what is wrong with them. Even these nine beneficiaries, this is a clear indication of failure by CEEC,” Mufalali said.

And Chadiza PF member of Parliament Jonathan Daka and his counterpart Victor Lumayi wondered why there was an irregular disbursement of loans when guidelines were put in place.

But in response, NAC Director Adrian Maanka said there was an amendment to the guidelines in order to accommodate more beneficiaries.

“In terms of the nine, the lack of endorsement from NAC is due to the fact that we varied that eligibility requirement before the screening commenced. We had a meeting with the finance committee which was responsible for screening and they received submissions to say a number of applications will be disadvantaged if we kept that particular requirement. So that requirement was varied to allow groups who might have been disadvantaged to still be able to submit. So that is how the nine appeared,” he said.

Meanwhile, Nalolo PNUP member of Parliament Imanga Wamunyima asked Maanka to explain why three unregistered entities were identified as beneficiaries.

“What was your interest in approving an entity that does not have the certificate of incorporation? You approved three entities and disbursed an amount of K658,138. These entities were not registered at the time of approval when you had a full blown screening process. So what happened here? Could you convince this committee why you approved beneficiaries who were not duly registered with PACRA?” asked Wamunyima.

In response, Maanka admitted that NAC did not ask for PACRA certifications from the applicants at the point of accepting applications.

“The art sector is generally informal and most of them were just formalizing when the fund came on board. So we allowed applicants to attach a receipt of their registration as they submitted applications. So based on the attachments that they gave, the decision was made to consider them valid. However, when it came to verification by CEEC that was doing PACRA searches later on, it was discovered that these particular ones had no business with them. So at the point of accepting applications, we were just looking at receipts which proved to be sufficient but we did not get actual certificates until later,” he said.

Former CEEC Director General Likando Mukumbuta said the identification of beneficiates was fully done by NAC while CEEC only verified.

“The National Arts Council conducted what was responsible of them. The agreement itself, it was not a fund management agreement in the sense of where a fund manager contracted will come and then the fund manager sees how best to invest the funds in line with the criteria. This is basically an agreement which they took advantage of the CEEC in order to have financial officers to monitor the loan facilities. So we can confirm that the decision on who the selection of beneficiaries were was solely on the Council while CEEC did the verification,” he said.

But Wamuniyima and Mufalali argued that reasons given by NAC and CEEC were not satisfactory as both institutions did not conduct due diligence in identifying beneficiaries even when they had adequate resources to do so.

Ministry of Tourism Permanent Secretary Evans Muhanga said there was need to address the loopholes in all empowerment programmes.

“When you look at the way the whole thing was administered, I think you can see that there were a lot of lapses. The contract was there but the institutions were unable to follow through the contract. This is why we have many issues for people who got money that even when we follow up on these contracts, yes there is covid but even then how are you going to pay? So those things are not clear up to now. All I can do is apologise that yes there were funds meant to help the artists but the administration of this fund has got a lot of loopholes. If it has to go forward, these are the things that we need to improve,” he said.

And PAC acting chairperson Jaqueline Sabao said the committee decided to send away the witnesses because they could not give proper answers

“PS, the committee has struggled to get answers from your team. As a committee, we will submit our recommendations based on your responses. We are now four hours into the meeting but we have not gotten proper answers from you. We are just going round to get answers. We have decided to send you back and we will give you a later date on when to reappear,” said Sabao.