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Tuesday, 7 September 2010

A Parastatal Horror Show (Hotel & Tourism Training Institute)

I thought I had a fairly good knowledge of all parastatals until I came across the Hotel and Tourism Training Institute (HTTI). It was allegedly set up by KK in 1989 to provide training in hotel and tourism management and is meant to run on a "commercial basis". In other words, it is a legacy of a centrally planned economy.  The Institute is effectively run by the Minister of Tourism through her direct appointment of the six board members. The current board has been running things since 2007 - so technically it is not "her people".

Unfortunately, this again one of the most poor run parastatals in our country. We can spot a disorganised parastatal by those magic words we are so familiar with : "Contrary to the HTTI deed, the Institute did not prepare the financial statements and the annual reports for the year ended 31st December 2008 as of March 2010".  For two years the company has not prepared statements! Shocking indeed, but not unusual as ZCCM-IH, ZAMTEL and others we shall meet will testify.

That  however did not stop Attorney General (AG) from finding more rottenness within the 2008 accounts.  First there's straight embezzlement of nearly 10% of the total HTTI revenue (total revenue is K6.7bn):
Out of the K1,393,665,863 released for the procurement of capital items, K588,194,787 was misapplied on payment of personal emoluments. Consequently, the Institute was not able to procure all the equipment that was planned for.
Then we have the usual favourites "staff related costs" and "inadequately supported payments" :
Contrary to the terms and conditions of service, amounts totalling K30,964,300 were paid in respect of Christmas bonuses to members of staff during the period under review despite the fact that the Institute made losses totalling K110,260,000 for the period.....Contrary to Financial Regulation No. 52, there were sixteen (16) payments in amounts totalling K75,841,387 that were inadequately supported in that the vouchers lacked supporting documents such as receipts, invoices and quotations.
This is mind boggling incompetence - why would a company pay bonuses to loss making employees? The other problem I have is that I really don't see why HTTI is owned by government. If Andrew Chipwende and his colleagues want to privatise parastatals, why not get rid of these unnecessary companies? This is not an area where the state should be providing colleges. The market can and appears willing to take care of this problem. But I know I am shouting in a vacuum because it is obvious HTTI is not going anywhere for the same reason it under-performs - it appears to me that it is a "cash cow".

Next Stop : Judicial Service Commission

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