DONORS have threatened to cut support to Zambia National Farmers Union (ZNFU) unless individuals involved in the abuse of about K34 million pay back the money to the institution.
They have also called for a complete overhaul of ZNFU management structure to ensure that there was accountability and to make sure that there was no repeat of misuse of funds.
According to the auditor’s report, the ZNFU board and management have been implicated in the looting and plunder of K34 million through loans and other financial inducements.
The donors cited a company called Jambo Tracking Zambia Limited, which allegedly over-billed the ZNFU through its vehicle tracking system, but apparently belonged ZNFU executive director Ndambo Ndambo.
According to the records obtained by the Daily Nation from the Patents and Companies Registration Agency (PACRA), Jambo Tracking Zambia Limited was incorporated on 16th July 2010 and has had its shareholding limited to Mr. Ndambo and his wife Jane Ngunjiri Ndambo of Kenyan origin.
The duo holds 20 million ordinary shares in the company with nominal capital of K20,000.
The company is alleged to have over-billed ZNFU and is alleged to have used Mr. Ndambo to win contracts for the company using his position to influence decision-making by eluding laid down tender procedures to give the company an unfair advantage over other potential bidders.
According to the Swedish International Development Agency (SIDA) special financial audit on the ZNFU, there was lack of evidence of transparency in contract award procedures to entities related to Mr. Ndambo or doing works for his properties, including the vehicle tracking company and landscaping and irrigation entities doing work on his private properties in addition to that of ZNFU.
The audit report suggests that the awarding process were clearly designed to suggest transparency in the awarding of contracts or procurement works but on which less than closer audit scrutiny revealed that the reported process undertaken was nothing more than smokescreens designed to create the illusion of transparency and due diligence in the awards, whose ultimate result was management impropriety, procurement fraud and misappropriation of donor funding of over K3 million.
There was also an excess of K2 million which ZNFU paid to the company from April 2013 which the audit team found unnecessary and an abuse of both authority and donor funds because ZNFU vehicles and bicycles were already insured.
The audit team also noted that the process of appointment of Jambo Tracking was non-compliant to both basic tender procedures or standards practice in appointment of parties related to key officers of the entity since there was no record of assessed need for the service being identified.
The report indicates that Mr. Ndambo only declared interest to the transaction to management after the bids were evaluated which indicated that the need for the services were likely to have been dictated by Mr. Ndambo and not independent technocrats at ZNFU.
Another anomaly raised by the audit team was that the bids of the company were evaluated by staff members who were direct subordinates of Mr. Ndambo and not board members as expected in transactions that involved executive directors, adding that the evaluation by subordinates suggested circumvention of the tender procedures and underscored the likely risk of Mr. Ndambo manipulating the bid procedures to benefit himself.
Massive misappropriation of donor funds of over K34 million in activities bordering on fraud, tax evasion and sheer abuse of authority have been unearthed at the ZNFU.