The 2008 Auditor General’s Report makes very sad reading for a developing country like Zambia which is heavily dependant on Overseas Development Assistance (ODA) and Foreign Direct Investments for its economic development. The financial irregularities highlighted are a stark reminder of the rather pitiful efforts that Government is making to deal with graft especially in the public sector. Further, Transparency International Zambia finds the wastefulness and recklessness exhibited by some public officers entrusted with the stewardship of public resources as reported in this Audit report is anything but criminal.

Transparency International Zambia notes with concern that the issues raised by the Auditor General in the 2008 Report have been raised on a regular basis in the past and the difference is that Government and all relevant stakeholders are simply not doing enough to arrest this trend. It would seem as if our leaders have become conditioned to the sad state of affairs depicted in the reports and are simply not moved to do anything meaningful. The revelations by the Auditor General are not only shocking but a demonstration of a serious lack of sensitivity on the part of some public officers to plight of the majority poor and vulnerable people. It also cast doubts on the suitability of some Controlling Officers who seemingly have failed to deal with the malaise and general anarchy in their respective Ministries or Spending Agencies. What we fail to reconcile is the fact that some Controlling Officers or Permanent Secretaries whose performance is dismal, continue in office or are simply moved to another Ministry by the appointing authority. This does not send the right signal that Government is anxious to rid the public sector of corruption.

Transparency International Zambia has noted with grave concern some of the revelations in the Auditor General’s report and some of these are simply too much and should serve as impetus for President Rupiah Banda and his administration to get serious with the fight against corruption. It will not do for President Banda to simply make mild statements like the one recently delivered on his behalf by the Minister of Local Government and Housing in Mansa during the opening of the Audit Offices. The Banda Administration should realize that corruption has become so endemic that it will not be addressed through mere political pronouncements. Some examples of the worrying levels of financial irregularities and impropriety highlighted in the report are as follows:

1.      It is disturbing to note that tax arrears have increased by 21% from K3, 452 billion to K4,179 billion and what makes it worse is that some of the main defaulters are government ministries and agencies. For instance, the Office of the President – Southern Province, by October 2009 had not remitted K1,115, 528,184 as tax for payment of monthly salaries. Clearly, if Government itself is failing to remit tax what gives it the moral right to call upon the private sector and others to remit their tax on time? We want to urge the Minister of Finance, Secretary to the Treasury as well as the Zambia Revenue Authority to put in place measures to ensure that all taxes that are due from defaulters especially public sector institutions, are paid as soon as possible.

2.      The Auditor General points to the fact that a total of K445,240,734,515 was unretired imprest. Surely is there justification for K445 billion of public money to be tied up in unretired imprest? This trend of public sector workers giving themselves interest free loans through ordinary or special imprest must come to an end. The K445 billion is not pocket change and this is money that could have been put to use in building new roads or paying Teachers outstanding arrears or indeed helping women and youth in terms of economic empowerment schemes. It is annoying to note that some national projects have failed to take off due to lack of resources and yet some Government officials at various levels are illegally holding on to public money by not retiring in good time. It is a shame that even if these public sector workers pay back – this money will be interest free. We demand that all those that have unretired imprest should immediately pay back and we want to urge Controlling Officers to follow strictly the financial regulations especially Regulation No 91 which requires that no officer shall be issued with subsequent imprest while the earlier one has not been retired. Transparency International Zambia would equally want appropriate sanctions to be meted to all those that have flouted the financial regulations.

3.      The Medical and Funeral expenses for the late Republican President need a public explanation. We are disturbed to see that the illness and funeral of the late Dr. Levy Mwanawasa was used as an opportunity for wanton pillage of national resources. There are a number of issues that need full explanation from Government. For instance, it was publicly announced that the French Government did pick up some costs related to the medical and transportation expenses- the question how much did we receive as support from the French Government? Secondly, numerous companies, institutions and individuals made donations towards the funeral- we would like a full account of how much was donated – materially or financially and how was this utilized? We would like to see a full account of the fuel and we would also want the imprest that still remains outstanding to be recovered immediately. Further, we would like the Ministry of Works and Supply to inform the nation – probably through the Public Accounts Committee on where the various materials procured for the funeral are. Transparency International Zambia has previously requested a public statement on this issue and it is a pity that Government has had to wait until the Auditor General picks up this

4.      The overpayment made to Southern Cross by the Ministry of Education for the procurement of 2 trucks by over K180 million needs explanation. We do not believe that Southern Cross did not realize this overpayment and we further find it difficult to understand why a repayment has not been made following this realization.  What is shocking about this whole transaction is that K1,234,063,100 was diverted from procurement of education materials without Treasury Authority. Every day, we hear the Hon. Minister of Education talking about the importance of education and yet her Ministry finds it necessary to divert funds from educational materials to procurement of Trucks.

5.      According to the 2008 Report, there are various overwhelming financial irregularities in the procurement of 100 hearses in the Ministry of Local Government and Housing. Contrary to the Application Act of 2008, out of the total amount of K50, 000,000,000.00 provided for Recurrent Grants to Local Authorities, the Ministry misapplied a total of K 14, 920,000,000.00 on the procurement of one hundred (100) hearses from Beijing Automobile Works Company in China. We recall that this is an issue that was raised by the late Minister of Local Government and Housing and the Republican President entered the fray and announced publicly that this issue was being handled internally. The purchase of the hearses raised a lot of public outcry and Government vehemently defended this decision. We would like to see this case investigated fully and all those involved brought to book regardless of their public standing.

As a way forward, TIZ would like to make a number of suggestions:

a.      The provision of the Public Finance Act should be followed and Government should as a matter of urgency set up Audit Committees in each Ministry and Spending Agency

b.      We would like to see concrete actions taken against all erring public servants and we urge Government to consider legal options as well instead of relying on administrative sanctions alone;

c.      We demand that Controlling Officers whose Ministries have gained notoriety in terms of financial irregularities, should be relieved of their duties immediately. We urge President Banda not to keep in employment Controlling Officers who fail to clear up their houses of financial irregularities;

d.      The problem of unretired accountable or special imprest, unvouched expenditure, over payment, unaccounted for funds etc, should be seriously be addressed. We would like to see a focus on strengthening internal controls and we urge the President to set clear targets for all Ministries to tighten their systems and an ultimatum should be given to those that fail to put their houses in order. In fact, we would like to urge Parliament not to vote for full budget for erring Ministries until they recover what they are owed or improve internal control systems.

e.      The law enforcement and investigating agencies should take keen interest in the matters that have been highlighted in the 2008 Auditor General’s report. We would like the Anti-Corruption Commission, the Zambia Police and DEC to take interest in these matters although it is a pity that all three institutions are also cited for some poor practices which include non-remittance of tax, irregular payments, unretired imprest among others.

f.        Government should put in place strategies to deal with wastage of resources- there is simply too much wastage of public resources and we would like see a blue print on how Government and all other stakeholders will reduce this wastage in the coming years.

 Transparency International Zambia would like to warn that unless practical action is taken on the Auditor General’s report – we risk turning this into nothing else but a public ritual which happens every year and is given 15 minutes of fame. The Auditor General’s Report should spur the Government into action and see to it that issues raised are dealt with expeditiously. We should stop merely talking about fighting corruption and start taking action against corruption.

Rueben Lifuka

TIZ CHAPTER PRESIDENT