……as details of 450 missing cattle emerge
By Nation reporter
ZAMBIA National Farmers Union (ZNFU) board should step down on moral grounds following revelations of a forensic audit report alleging inconsistencies amounting to K34 million, Zambia Institute of Chartered Accountants (ZICA) founder member Eddie Hamakowa has said.
Speaking in a walk-in interview at the Daily Nation offices yesterday, Mr Hamakowa, who is a founder ZICA member, said ZNFU had conducted itself inappropriately on the matter by going to the media in trying to resolve matters.
Meanwhile, details are emerging that more than 450 animals costing more than K675, 000 intended for small scale farmers, were shared among senior officials.
Three officials shared 300, 100 and 50 each of the animals which were reportedly bought from donor funds which should have been given to farmers.
The animals were reportedly held in farms on the Copperbelt where the chiefs have offered the senior officials more than 2,700 hectares.
According to the recent audit report, K40,000 was used to buy animals from the Zambezi Ranching and cropping company, but officials yesterday disputed the figure suggesting that 450 animals were bought at K15, 000 each.
“These animals were shared among senior officials who have taken them to their farms on the Copperbelt. Anyone can go to the Copperbelt and check.” They said.
According to the audit report indicates that “Payments of K40, 000 were made to Zambezi Ranching & Cropping Limited on items that management could not properly explain or support using e.g. GRNs.”
Initially the audit found costs amounting to K40, 000 relating to Commercial maize purchases on 10th April 2015 from Zambezi Ranching & Cropping on Invoice No. INA11544. When queried on why ZNFU made this purchase and where goods received notes were held to show the purchases, staff members were unable to provide evidence on this transaction.
In fact, staff suggested this cost was for the purchase of cattle for an official. The audit was unable to determine the true nature of this transaction.
The analysis concluded that the Payments was on unauthorized lines representing fraudulent use of donor or corporate funds as a result the funds were not eligible to be considered for legitimate donor fund use.
However the regional manager for the Copperbelt Michael Zulu yesterday denied any knowledge of the animals being held in farms allocated to the officials.
And Mr Hamakowa said the board was in error to defend itself publicly, but that the issues raised in the audit report were earlier supposed to be resolved at a meeting between the board and management.
“As an accountant and member of the Institute of Directors I am appalled by the February 3, 2016 press statement signed and issued by the directors of ZNFU and causing it to be published in the press,” he said.
Mr Hamakowa stated that this was in accordance with audit principles which required an exit meeting where auditors highlight key findings and issues which need further clarification.
“It is at this meeting that management and directors discuss and resolve any non-factual findings,’’ he said.
Mr Hamakowa said: “If this process was followed, the directors should have addressed those issues they were uncomfortable with; if they did not follow this process, then they don’t understand their responsibility as directors.’’
The former director of finance at BP Zambia defended the auditor whom he said must have produced the report in accordance with normal audit procedures.
Mr Hamakowa expressed dismay at the conduct of the ZNFU and said the board must step down on moral grounds.
However, the ZNFU board earlier this month discredited the preliminary forensic audit report conducted by EMM Corporate Partners which revealed inconsistencies amounting to K34 million.
The board subsequently engaged ZICA to audit the professional conduct of the auditor and auditee, after which the board expected an independent auditor to be engaged to conduct a fresh audit.
ZICA has since started its review.
However, the Drug Enforcement Commission has entered the case after the commission conducted a search at the ZNFU headquarters and instituted investigations in the alleged fraud case.
The ZNFU board president Dr Evelyn Nguleka speaking in press statement on Wednesday this week, said the operations of ZNFU will continue to run as stakeholders await the findings.