AUDITOR General Dick Chellah Sichembe says wasteful expenditure on the accounts of the Republic increased from K3.7 million in 2019 to K1.4 billion in 2020.
Dr Sichembe addressed journalists at his office in Lusaka yesterday.
The media briefing was centred on the Auditor General’s Office sharing salient issues on the report of the Auditor General on the accounts of the Republic for the financial year ended December 31, 2020 and the report of the Auditor General on the accounts of parastatal bodies and other statutory institutions for the financial year ended December 31, 2019.
According to Article 212 of the Constitution of Zambia (Amendment) Act No. 1 of 2016, the Auditor General shall no later than nine months, after the end of a financial year, submit an audit to the President and the National Assembly on accounts of the Republic audited in respect of the preceding financial year.
“In view of the foregoing, I am delighted to inform you that I successfully met this constitutional requirement yesterday, 29th September 2021,” Dr Sichembe said.
He said the said report on the accounts of the Republic for the financial year ended December 31, 2020 generally reveals evident financial irregularities in ministries, provinces and agencies.
Dr Sichembe noted that the irregularities that have increased outnumber the irregularities that have reduced during the period under review, “thus negating the strides made in the management of public resources.”
He indicated that the irregularities that have seen an upward trend include wasteful expenditure, failure to follow procurement procedures, unvouched expenditure, unaccounted for revenue, unaccounted for funds, unretired accountable imprest, irregular payments, failure to recover loans and non-submission of expenditure returns.
“The largest irregularity amount in the report is wasteful expenditure which increased from K3.7 million in 2019 to K1.4 billion in 2020 representing an increase of 378 per cent,” Dr Sichembe said. “This irregularity involves Ministries of Finance – Head 21 K856 million in payment of interest and penalties incurred on a contract between Food Reserve Agency and Advanced African Solutions; housing and infrastructure – K362 million in payment of accrued interest and transfer of property tax, transport and communication – K153 million; general education – K32 million, fisheries and livestock – K9 million; water development sanitation and environment protection – K4 million, among others.”
He explained that wasteful expenditure is expenditure incurred where the government does not derive any benefit or obtain goods and services at exorbitant prices or cost.
Dr Sichembe noted that the implication of wasteful expenditure is that deserving sectors of the economy are deprived of the much-needed resource.
“Going forward, the Office through its forensic and investigations unit, will actively follow up such matters to their logical conclusion to understand the motive behind such expenditures,” he said. “Where it is evident that an offence was committed arising from the wasteful expenditure, the Office will engage law enforcement agencies [with] whom we have established memoranda of understanding to take up the matter.”
Dr Sichembe added that the report had also cited the second largest irregularity amount as failure to follow procurement procedures in four amounts totaling K234 million.
“This irregularity increased from K504,500 in 2019 to K234 million in 2020, representing 463 per cent increment,” he explained. “The huge jump is of great concern to us as an office as it is a clear indication of non-compliance to the Zambia public procurement Act and disregard of procurement guidelines in the purchase of various goods and services.”
And Dr Sichembe said the report on accounts of parastatal bodies and other Statutory Institutions for the financial year ended December 31, 2019 reveals poor financial performance.
“The report highlights failure to collect funds in amounts totalling K16.6 billion as the largest irregularity, followed by failure to settle/remit statutory obligations K1 billion during the period under review,” said Dr Sichembe.
