FRA wasted K23.6bn on GMO maize - report
FRA wasted K23.6bn on GMO maize - reportBy Chibaula Silwamba
Wednesday July 09, 2008 [04:01]
THE Auditor General's report on parastatal bodies has revealed that the Food Reserve Agency (FRA) wasted over K23.6 billion when it purchased Genetically Modified Organism (GMO) maize contrary to presidential directives. And the FRA has not accounted for about K6.9 billion.
According to the report of the Auditor General, Anna Chifungula, for 2006 on the accounts of parastatal bodies dated May 16, 2008 which is due to be submitted to the National Assembly and obtained by The Post, the FRA has numerous financial irregularities.
"Contrary to the 2006 presidential directive on the importation of genetically modified maize, the agency in the same year imported, paid and received 3,000 metric tonnes of maize from Nyiombo valued at K3,689,647,200 (US$1,080,000) and 16, 000 metric tonnes of maize from Louis Dreyfus valued at K20,006,087,040 (US$5,856,000)," the report stated. "In addition, 6,000 by 50 kilogramme bags of GMO maize were delivered and received in Mkushi in May 2006. It was further observed that management gave Louis Dreyfus Limited a second contract without consulting the board for the supply of 12,000 metric tonnes of maize instead of buying cheaper maize which was to be ready at the end of March, 2006."
The report also revealed that FRA could not account for K6.9 billion.
"During August and September 2004, five cheques were drawn in amounts totalling K6,907,160,000 to four commercial banks for transfer whose purpose could not be ascertained due to lack of supporting details," it stated. "There were 84 payments in amounts totalling K699284,123 made between June and October 2004 that were inadequately vouched in that they lacked supporting documents such as receipts, invoices and goods received notes. Unacquitted payments; payments in amounts totalling K110,908,000 made to 23 officers between April and October 2004 had not been acquitted."
The audit report revealed that a Malawian company called Simama General Dealers has not paid about K1.3 billion to FRA for the maize that was supplied to the same company.
"In May 2005, the agency supplied 3,158.58 metric tonnes of maize valued at K2, 336, 211, 236 (US$498, 172.80) to Simama General Dealers of Malawi. However, details of the contract could not be determined as the agency failed to avail the contract document. As of December 2007, only K984,807,600 (US$ 210,000) had been paid by Simama General Dealers leaving a balance K1, 351, 403, 636 (US$ 288,172.80) outstanding," the audit report revealed.
The report further stated that in 2005, the FRA terminated the contract of the financial controller, who at the time of termination of contract owed the agency K109,733,711 being outstanding from a loan of K329,176,988 obtained as car and house loans.
The report noted that as at July 2007, the FRA had not recovered the K109,733,711 from the former financial controller despite the court ruling in favour of the agency.
"APG Milling - fertiliser debt; In 1999, the agency entered into an agreement with APG Milling for the supply of 3,684 by 50 bags of fertiliser to APG Milling. According to the agreement, APG Milling was to pay back 150 kilogrammes of maize for each 50 kilograme of fertiliser loaned or a cash equivalent to the selling price of maize at the time of repayment. The expected repayment from APG Milling was therefore 11,052 by 50 kilogramme bags of maize. It was, however, observed that only 5,113 by 50 kilogramme bags of maize had been paid back leaving a balance of 5,939 by 50 kilogramme bags outstanding as at December 2007," the audit report revealed.
The report also observed that the FRA did not present audited accounts for the financial years ended December 31, 2002 to 2007, as required by law, to the minister for tabling in the National Assembly as at December 2007.
"In addition, the agency failed to avail records pertaining to the physical crop stocks for the years ended 31st December 2005, 2006 and 2007 and government's target strategic reserve for the financial years 2002 to 2007," the audit report stated.
The report also noted that imprest totalling K32 million issued to 14 officers in 2004 had not been retired as of December 2007.
The report further revealed that in March 2005, three officers whose contracts had expired and were paid their gratuity, were irregularly paid three months salaries in lieu of notice in amounts totalling K120 million.
However, the trio was re-engaged on three-year contracts at the end of the same month of March 2005.
The audit report also revealed that 22,276 by 50 kilogramme bags of maize valued at K824 million were under-grade at the storage facilities in Kalomo in Southern Province.
"There were 15,000 by 50 kilogramme bags of maize valued at K555 million which were torn thereby exposing the maize to adverse weather conditions and wastage," stated the auditor general's report.
Labels: ANNA CHIFUNGULA, FRA, MAIZE, MALAWI
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