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AG report reveals financial irregularities at ZAWA

AG report reveals financial irregularities at ZAWA
By Chibaula Silwamba
Monday June 18, 2007 [04:00]

THE Auditor General's report has revealed that the Zambia Wildlife Authority (ZAWA) has not paid about K23 billion Pay As You Earn and pension contribution to Zambia Revenue Authority (ZRA) and NAPSA respectively. And a former director general of ZAWA was irregularly paid about K550 million after his contract was terminated.

Meanwhile the report revealed that a managing director of the Engineering Services Corporation of Zambia (ESCO) had his contract terminated after he misappropriated, for personal use, about K400 million.

According to the audit report on parastatals for the financial year ended December 31, 2005, released by Auditor General Anna Chifungala, ZAWA had not remitted about K19.7 billion to ZRA and about K3.5 billion to National Pension Scheme Authority (NAPSA) as of October 2006.

The report revealed that ZAWA lost about K1.3 billion because it could not collect the money from debtors.

The report stated that the ZAWA management applied to the board to write off the debt after it failed to collect the money.

"It was observed that ZAWA did not have an effective mechanism of monitoring its debtors. In this regard mounts totaling K1, 300, 233, 627, owed by 19 operators who had since abandoned their projects and left the country or were wrongly classified, could not be collected," the reports stated. "Consequently, ZAWA management applied to the board to write off the debts."

The report further revealed that ZAWA paid full gratuity and allowances to a director general whose contract had been terminated.

"According to the contract, the former director general was entitled to, among others, a gratuity paid tax free at 35 per cent of basic salary payable on termination or expiration of contract. To be eligible for pro rata entitlement, the director general should have served for at least two years of the contract.

It was observed however, that though the contract provided for non-payment of gratuity in the event that the contract is terminated before serving two years, the authority paid his full gratuity and salary for the remaining two years that he had not served in amounts totaling K335, 488, 842. In addition, the former director general was paid K215, 000, 000 in allowances relating to the remaining period of the contract resulting in an irregular payment of K550, 488, 842 which is recoverable," the report stated. "In his response dated November 12, 2006 the director general stated that this was a matter of the board and the Ministry (of Tourism, Environment and Natural Resources) to address as that were the ones who knew what happened."

On ESCO, the report stated the former managing director used company money, about K350 million, to buy a company house, which was offered to him.

"Between August 2005 and October 2005, the managing director again irregularly, using company funds spent a total amount of K40, 187, 625 in renovations and sinking of a borehole at the same property," the report stated.

It stated that after the transfer of title, the managing director wrote to the board chairman requesting for an advance of K350, 000.

"However, the board declined to approve the transaction and consequently, at its meeting held on 4th March, 2006 resolved and terminated the managing director's contract of employment and placed a caveat on the purchased house and reported the matter to the Anti-Corruption Commission who were still investigating the matter as of October 2006," stated the report.

Labels: ATTORNEY GENERAL, CORRUPTION, ZAWA

posted by MrK @ 3:40 PM