Massive misappropriation of donor funds totalling more than K34 billion (old currency) in activities bordering on fraud, tax evasion and sheer abuse of authority have been unearthed at the Zambia National Farmers Union (ZNFU).
Foreign donors to the organisation have now threatened to cut support to the ZNFU unless the money is refunded.
But when contacted for a comment, ZNFU executive director Ndambo Ndambo declined to comment saying the organisation would issue a statement later.
The detailed 242-page forensic audit undertaken by the donors has revealed glaring abuses of funds, perpetuated over the years by senior management complicit with presidents of the organisation.
The donors have now asked the presidents and officials to refund money paid to them illegally and for the serving president and senior staff to step down and for the entire financial and accounting team to be subjected to disciplinary procedures for fraud, professional misconduct and deliberate concealment of wrong doing.
According to a preliminary draft financial report compiled by the Swedish International Development Agency obtained by the Daily Nation, the ZNFU top management compromised presidents of the organisation and boards which were supposed to provide oversight to avoid fraud theft and abuse of funds.
The report cites a case where close to K1billion of donor funds were used for a contract for vehicle tracking, paid to a company owned by a senior officer and his wife.
Apart from contracting his own company ZNFU was overbilled for the use of the tracking system for vehicles, some of which did not belong to ZNFU.
The same official incurred more than K4 billion in several allowances including gratuity, unretired imprest and many other expenses that could not be justified in the audit. In another case which the official has disputed more than K1 billion was used for landscaping at his farm including the equipment.
The same officer also obtained more than 4 billion in unsupported gratuity and salary advances which the accounting office could not explain.
Property that should have been in the name of ZNFU was registered in unrelated names thereby causing loss to the donors who provided the money.
The fraudulent and corrupt dealings from the headquarters in Lusaka cascaded into provincial and district structures where membership records were often falsified.
ZNFU is supported by Finland, Sweden and We Effect which have been providing core funding, but revelations of the massive abuse of funds perpetrated through fraud, theft and unauthorised loans, irregular contracts, fraudulent procurement and sheer impunity has forced the organisations to seek immediate recompense, changes to the leadership of the organisation, implementation of anti-fraud policies and complete re-imbursement of stolen funds.
The financial report has also recommended that a former ZNFU president who sits on the board of directors should be removed for allegedly participating in what appeared to be questionable transactions on donor funds for his and the executive director’s interests. The report states that the former ZNFU president’s conduct hampered his ability to prevent usurpation of the powers of the Board by the executive director.
“He (former ZNFU president) should also be requested to explain why he approved loans of K100,000 to the executive that were outside policy, and why he himself got K27,000 in loans, that were also not constitutional and were clearly from donor funds and more importantly were seemingly, not repaid,” part of the report reads. The report has recommended that officers should be subjected to a direct investigation into what appears to be gross fraudulent conduct, uncovered by the audit, including any others, should lead to, in the least, recovery of all monies apparently dishonestly procured from donor funds held by the ZNFU.