The latest report of the Auditor General on the Accounts of the Republic for the financial year ended 31st December 2017 has revealed a reduction in the misapplication of Funds from K162 million in 2016 to K61 million in 2017.
The report however revealed glaring irregularities in the various Ministries, Provinces and other Spending Agencies.
It highlighted some reductions in Unaccounted for Revenue from K3 million in 2016 to K873, 000 in 2017, Unvouched Expenditure from K170 million in 2016 to K14 million in 2017 and Undelivered materials from K116 million to K1 million among others.
According to a statement issued by Ellen Chikale, the Auditor General’s Office Head Public Relations, despite, a reduction in the misapplication of Funds, it is still the highest-ranking irregularity for the period under review and continues to be an area of high concern for the Office.
Ms. Chikale said the other irregularity that is of high concern to the Office is Irregular Payments which have increased from K1 million in 2016 to K21 million in 2017.
She said the audit of 2017 covered areas that cut across all the five Developmental Strategic Areas of the 7th National Development Plan and the issues mentioned in the report are those which could not be resolved during the audit process and those which were highlighted in the previous reports, but had not been corrected as of 24th September, 2018.
Below is the full Report
PRESS RELEASE
For Immediate Release
The Report of the Auditor General on the Accounts of the Republic for the financial year ended 31st December 2017 is out with glaring irregularities in the various Ministries, Provinces and other Spending Agencies (MPSAs).
The Report which was tabled on floor of the house on 16th October 2018 has highlighted some reductions in Unaccounted for Revenue from 3 million kwacha in 2016 to 873 thousand kwacha in 2017, Unvouched Expenditure from 170 million kwacha in 2016 to 14 million kwacha in 2017 and Undelivered materials from 116 million kwacha to 1 million kwacha among others.
However, these gains have been reversed by the several areas of concern such as Unaccounted for Funds that has increased from 386 thousand kwacha in 2016 to 31 million kwacha in 2017, Misappropriations of Funds from 3 million kwacha in 2016 to 5 million kwacha in 2017 and Overpayments from 1 million kwacha in 2016 to 7 million kwacha in 2017. These irregularities in some instances increased by more than 500 percent.
Although Misapplication of Funds seems to have reduced from 162 million kwacha in 2016 to 61 million kwacha in 2017, it is still the highest ranking irregularity for the period under review and continues to be an area of high concern for the Office as it entails that institutions applied funds budgeted for a specific programme on unrelated programmes without the authority from Secretary to the Treasury thereby depriving the beneficiaries of the much needed benefits from the said programmes.
The nation may wish to know that although Misapplication of Funds on face value may appear to be a lesser evil especially if applied on buying medicines in hospitals, but it may have some criminal undertones especially if paid to officers purporting to be undertaking government programmes when in actual fact they may have no intentions to travel and carry out the work. This irregularity deprives Government of the resources to be applied on developmental issues instead of benefiting a few individuals.
The other irregularity that is of high concern to us is Irregular Payments which have increased from 1 million kwacha in 2016 to 21 million kwacha in 2017.
The audit of 2017 covered areas that cut across all the five (5) Developmental Strategic Areas of the Seventh National Development Plan and the issues mentioned in the report are those issues which could not be resolved during the audit process and those which were highlighted in the previous reports, but had not been corrected as of 24th September, 2018.
It is also worth noting that the Office interacted and communicated with Controlling Officers whose accounts were audited at various levels. The purpose of this interaction was to provide an opportunity for the Controlling Officers to clarify and take corrective action on the findings of the audits by so doing demonstrate the value and benefits of the Supreme Audit Institution (SAI).
The Report contains seventy four (74) paragraphs consisting of sixty one (61) paragraphs on audit matters whilst thirteen (13) paragraphs are on other matters. In addition, the Report contains audit recommendations which are aimed at addressing the issues raised during the audit process.
The nation can further take comfort in the fact that the audit was conducted in accordance with the International Standards of Supreme Audit Institutions (ISSAIs) which are the standards relevant for the audit of Public Sector entities and are issued by the International Organisation for Supreme Audit Institutions (INTOSAI) to which the Office of the Auditor General is a member.
Also interesting to note is that the Office has for the second time issued an opinion on the Consolidated Financial Statements of Government in line with Article 211 of the Constitution of Zambia (Amendment) No. 2 of 2016.
The table below shows a comparative summary of some of the major issues contained in the report for your scrutiny.
Details
|
2017
K
|
2016
K
|
2015
K
|
Unaccounted for Revenue
|
873,649
|
3,700,509
|
558,449
|
Unaccounted for Funds
|
31,200,930
|
386,834
|
193,910
|
Misapplication of Funds
|
61,657,450
|
162,095,699
|
28,153,997
|
Unretired Accountable Imprest
|
4,073,434
|
17,559,399
|
12,659,892
|
Unvouched Expenditure
|
14,137,189
|
170,554,478
|
349,306,160
|
Unaccounted for Stores
|
6,370,531
|
14,428,573
|
13,460,323
|
Irregular Payments
|
21,791,360
|
1,591,348
|
115,350,860
|
Non Recovery of Loans and Advances
|
901,507
|
1,689,982
|
2,352,451
|
Failure to Follow Procurement Procedures
|
1,051,686
|
509,535
|
35,701,492
|
Undelivered Materials
|
1,486,568
|
116,759,240
|
251,523,804
|
Non -Submission of Expenditure Returns
|
29,409,484
|
40,705,270
|
6,308,762
|
Wasteful Expenditure
|
7,865,395
|
3,586,879
|
39,854,959
|
Overpayments
|
7,437,149
|
1,061,247
|
26,559,013
|
Misappropriation of Funds
|
5,036,051
|
3,618,127
|
–
|
The report is now a public documents which can be accessed from the Office of the Auditor General in Long acres and the Office website: www.ago.gov.zm in due course.