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Audit report reveals financial irregularities at Mongu council

Audit report reveals financial irregularities at Mongu council
By Mwala Kalaluka in Mongu
Mon 02 Aug. 2010, 04:00 CAT

AN audit and inspection report of books of accounts at Mongu Municipal Council for the period September 2009 to March 2010 has exposed glaring financial irregularities and fraudulent activities at the MMD-dominated local authority.

The audit that was undertaken by Western Province senior local government auditor a
Mr M. D. Sikaale and obtained by The Post, has revealed, among other things, that there was gross negligence in the utilisation of the Land Development Fund. The report stated that during the period under review, Mongu Municipal Council received a total of K500 million as Land Development Fund.

“During the period under audit the account became inactive as the funds were all utilized by the month of July 2009,” the report stated.

“The Council paid the office of the Surveyor General kwacha three hundred and eighty million (K380, 000, 000) only for surveying of 1000 plots at K380, 000 for each plot. So far only 170 plots have been surveyed.”

The report highlighted that a review of the council records in the Finance Department does not indicate the Surveyor General as one of the debtors under the Fund.
“Further there is no communication between the Council and the office of the Surveyor General to demand the completion of the demarcations,” the report read in part.

“There is a risk that the remaining works may not be completed and the Council may lose K110, 200, 000 out of the total amount paid. The level of negligence by the Council not to recognize such a huge debtor in its books may mean that many more debtors are missing.”

The audit indicated that Mongu council should take interest in accounting for such transactions as an amount of about K110 million was too huge not to be recorded anywhere in the council books.

The report further stated that Mongu council received K100 million as Integrated Development Funds but that instead of depositing the funds in the Land Development Fund account, a separate account was opened.

The report revealed that Mongu council management was abusing junior officers to draw huge sums money and did not record them as imprest but expended them directly.
According to the audit inspection, disguised and unposted imprest amounting to K41, 495, 000.00 was recorded in the name of one officer, Matomola Kabukabu.

“Detailed tests carried out reviewed that imprest was not posted in the imprest ledger for Mr. Matomola and that immediately after withdraw cash was handed to the Director of Finance. It is clear that Matomola was just used as a cover-up,” the report stated.

“There are several such transactions in the names of Mr. Matomola and Mr. Nyambe. Management should draw imprest in their names so that they are accountable for it.”

The audit also revealed that amounts totaling K1, 025, 000 were not accounted for in the period under audit.

There were also fraudulent payments amounting to K9, 625, 000.00 that were noted involving overpayments made to the council driver Mubita Kufamuyeke and a Mr Chitengi who had undertaken some official duties away from the office.

“The above payments were signed for as having been received. The payment K5, 775, 000.00 to the PPH driver was not signed for as having been received,” the report stated in part. “However the double payments to Mr. Kufamuyeke of K3, 400, 000.00 and K7, 250, 000.00 were signed for as acknowledgment of receipt. The payment to Kufamuyeke constitutes a double payment while the payment to the PPH driver is fraud.”

The audit recommended that these two payments must be investigated for possible fraud and likely prosecution of the perpetrators.

“Kufamuyeke Mubita must be probed and possibly relieved of his duties for involvement in fraudulent activities,” the audit stated.

It was further highlighted in the audit that amounts totaling K4, 130, 000.00 out of the K26, 665, 000.00 that was withdrawn by the council on November 20, 2009 to pay some officers had been misappropriated.

“The K4, 130, 000.00 was misappropriated as the Director of Finance could not give any break down on how the balance was used. Initial investigations had revealed that payment was made to Mr. Litebele. Later the voucher for Mr. Litebele was withdrawn. Up to the time of the Audit, there were no records to show where the K4, 130, 000.00 was used,” the report stated.

The audit report further noted that for the period under review, the council paid salaries without preparing the payroll.

“The salaries are prepared by a junior officer who was not on the permanent establishment there after there was no one checking,” the report stated.

“The Council should prepare a payroll which should be checked by internal audit and approved by a senior officer before any payment is done.”

It was noted that Mongu council introduced strange allowances (special allowance) that did not appear in the conditions of service.

“It is unfortunate that the Council is failing to pay allowances entitled to workers such as Education allowance. Yet would want to manipulate allowances they are not entitled to,” the report stated.

“Any attempt to continue with the current manipulations must be treated as fraud and the perpetrators must be brought to book.”

Labels: AUDITING, CORRUPTION, M.D. SIKAALE, MONGU

posted by MrK @ 3:15 PM