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Sunday, 5 September 2010

A Parastatal Horror Show (Electoral Commission of Zambia)

Strictly speaking a "parastatal" refers to a legal entity that is owned by government  to undertake commercial activities on behalf of government. The Electoral Commission of Zambia (ECZ) is therefore not a parastatal rather it is a "government agency". Anyway the Attorney General (AG) thinks it is a "parastatal" so who am I to argue with the excellent Mrs Chifungula?  Besides I am happy she has lifted the covers to check the rot. That said, its worth keeping that distinction in mind as we weave through the report, largely because "agencies" face different problems to traditional "parastatals".  The problem with agencies is principally corruption or embezzlement. In this regard the latest report on the AG has similar horrors.

The focus is on ECZ expenditure during the 2008 presidential bye-election - a staggering huge expenditure (part funded by donors) : "In the estimates of Revenue and Expenditure for the financial year ended 31st December 2008, an authorized provision of K 248 ,940 ,655,190 was made for the operations of the Commission against which amounts totalling K249,069,979,028 were released".  To underline - K250bn was spent on ECZ largely due to the by-election. I touched on this cost blunder at the time - A costly constitutional blunder.  With such large money at stake it's inevitable it will be abused.

We have shadow payments without receipts and invoices :
Contrary to Financial Regulation No.52, three (3) payments in amounts totalling K403,129,050 made during the period April 2008 to December 2008 were inadequately supported by documents such as receipts, invoices, among others...
The government employee favourite is always "unretired imprest" :
Contrary to Financial Regulation No.96 (1) imprests in amounts totalling K352,125,420 paid to three (3) officers in February 2008 had not been retired as of March 2010.
Then comes the mother of all problems that highlights how poorly the ECZ is run - the non remittances of statutory deductions :
A review of accounting records at the Commission revealed that PAYE and NAPSA contributions in amounts totalling K2,493,570,690 were owed to the Zambia Revenue Authority and National Pensions Schemes Authority respectively as of June 2009......The failure to remit statutory contributions will attract penalties from ZRA and NAPSA.
For those who advocate for greater decentralisation, there are additional worries. What I have seen so far is that there's a lot of corruption at the local level. The ECZ is no exception, as seen from the latest "unaccounted for funds" in our councils :
During the year under review ECZ conducted presidential and parliamentary bye elections. To this effect, ECZ disbursed amounts totalling K109,194,379,000 to all the districts during the period between September and December 2008 for the purpose of the bye elections. Out of a total of K12,375,933,462 disbursed to six (6) councils, amounts totalling K263,042,782 could not be accounted for as there were no expenditure details provided to ascertain how the funds were utilised....Contrary to Financial Regulation No.52, payments in amounts totalling K1,052,970,765 made by three (3) Councils were inadequately supported in that there were no receipts, invoices among others..
I am disappointed with Justice Florence Mumba and her failure to run ECZ properly and ensure it remits its taxes and keeps corruption at the local level in check. She has been calling for greater funding (see here, here and here) and many of us have supported such calls. But it now seems to me that people at ECZ have poor incentives to perform properly. They realise that the country needs elections and the donors are always willing to pay up (by the way which serious nation would have its elections externally sponsored?). So they just tick along and the result is what is highlighted in the report.

Next Stop :  The Hotel and Tourism Training Institute Trust

Previous Posts :
A Parastatal Horrow Show (Chambeshi Water)

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