Maravi

Govt consulting over report on ZNBC – Shikapwasha

Govt consulting over report on ZNBC – Shikapwasha
Written by George Chellah
Wednesday, July 01, 2009 3:45:34 PM

INFORMATION minister Lieutenant General Ronnie Shikapwasha yesterday said the government is currently making formal consultations on the Auditor General’s audit report on the Zambia National Broadcasting Corporation (ZNBC).

Commenting on the Auditor General's audit report on ZNBC, which revealed several financial irregularities, Lt Gen Shikapwasha, who is also chief government spokesperson, confirmed that the Ministry of Information and Broadcasting had received the report on the corporation.

"I have got the audit report...I see you have published it. As government, we are doing the formal consultations, the report was given to me. The auditors gave a report and ZNBC management responded," Lt Gen Shikapwasha said.

"That's the report I got, it's a complete report. I only got a complete report last week. Anytime we should be able to conclude the consultations."

And sources within the ministry of information said the response given by ZNBC management to the audit report was not satisfactory.

"When you read the audit queries being raised by the auditors and the response given by ZNBC management, it's clear that management has not answered those queries, they were just making attempts to respond. Actually, some of the responses in that report are laughable," the source said.

"It's clear that both the ZNBC board and management have failed to run the corporation. What type of management can be talking of typing errors as being reason why six vehicles belonging to the corporation were irregularly disposed off by public tender? They have simply failed to run that institution.

"When you talk of barter system, there is a list of about 52 companies or so that the corporation does business with but in that audit when you check you will notice that management is only citing two companies. All these are just excuses," the source said

The sources said the minister of information should take action on the abuses because workers at the company could be agitated as the information was now in public domain.

The Auditor General's interim audit report on ZNBC revealed several financial irregularities, which include loses incurred amounting to K6 billion, tax evasion on retirement and gratuity and hefty board allowances among others.

According to the interim audit report obtained by The Post, in an internal minute dated November 12, 2008 the minister of information and broadcasting services approved the new sitting and quarterly allowances for the board.

"It was however observed that the quarterly and sitting allowances had been backdated to July 1, 2008. In this regard, the board members received arrears in the sum of K104,200,000.00," the report stated.

"It was also observed that the board and its subcommittees met 44 times between March, 2008 and March 2009. In this regard, a total of K384,300,000.00 was spent on board allowances during the period in question."

But ZNBC management's response to the above irregularity was that the application for review of the board's quarterly and sitting allowances was made on July 30, 2007.

"In that letter, the board chairman was seeking the minister's approval for an upwards review of sitting allowances so as to approximate the level obtaining in other public media at the time," management stated.

"The minister's approval was silent on whether or not the adjustments were effective from the date of the letter of the request. After debating the matter in the board meeting of November 17, 2008, the board was of the firm view that the adjustments were applicable from the date that the approval was sought from the minister."

On board allowances, management responded: "The correct position is that the 44 board meetings were held over a period of two years, i.e. from March 2007 to March 2009."

Barclays Bank head of government relations Augustine Seyuba chairs the ZNBC board. The other board members are information permanent secretary Emmanuel Nyirenda, Sr Rose Nyondo, Elias Mpondela, Joseph Chileshe, David Chimpinde and Bertha Lishomwa.

The report further showed that the corporation operated without a strategic plan up to the year ending 2008 and that a strategic plan covering the period 2009 to 2014 had however been put in place at a cost of K54,045,312.

But in response ZNBC explained that, just like government, management was using its corporate budgets, which are prepared annually to run the corporation.

The report revealed that the corporation incurred loses of K1,821,145,000 in 2006 and K5,072,962,000 in 2007 and that interim results for 2008 showed that the situation was not likely to change.

"The losses are mainly attributed to staff costs which represented between 70 per cent and 80 per cent of turnover as opposed to the industry norm of 30 to 40 per cent," it stated.

In response, management agreed with the auditors that most of the financial resources were being spent on staff costs.

The report indicated that a review of the March 2009 payroll revealed that 43 per cent of the total payroll related to 74 management staff while 57 per cent related to 343 unionised staff.

Management's response was that: "Whereas the auditors concentrated on the payroll issues, staff costs constitutes all costs including those paid outside payroll."

The audit report stated that the corporation's current assets were insufficient to cover the current liabilities.

Recently, workers at ZNBC demanded a salary increment of K700,000 but management asked the workers to forego their demands as the company faced difficulties due to the global economic meltdown. After a series of meetings the workers downed tools and demanded the removal of the board and management.

Following the protest, information minister Lieutenant General Ronnie Shikapwasha intervened and advised the workers to return to work and asked the Auditor General's office to carry out an audit on the allegations levelled against management and the board. Salasini went on leave and the special audit on the company was carried out from May 6 to 31, 2009.

Labels: AUDITOR GENERAL, RONNIE SHIKAPWASHA, ZNBC

posted by MrK @ 2:46 PM