By Nation Reporter
SWEDEN and Finland have demanded that the Zambia National Farmers Union (ZNFU) should pay back the K33, 944, 347 donor funds which have been misappropriated by ZNFU top officials in suspected high levels of fraud.
This came to light after a Swiss entity KPMG, which is also a Finnish limited liability company, conducted a private audit at ZNFU.
Unveiling the audit conducted by KPMG of Finland, Swedish head of mission in charge of bilateral development cooperation in Zambia David Wiking told a media briefing that some of the findings in the report were of serious concern and constituted breach of the agreement between donors and the farmers’ mother body.
He said the accounting and financial reporting of the ZNFU could not be considered as reliable.
Mr Wiking has since appealed to the Zambian law enforcement agencies to follow up on the KPMG findings so that possible fraudulent activities were properly investigated and appropriate action taken in order for the funds intended for the benefit of Zambian farmers were recovered.
Asked whether the donors would suspend funding to ZNFU and other projects in Zambia, Mr Wiking acknowledged that the farmers union had created a ‘‘damage risk’’ on other programmes in Zambia.
He however said both Sweden and Finland were currently working on how best they could improve the regulations and timely special audits to all their funded projects in Zambia.
According to the report, the salary paid to the ZNFU executive director Ndambo Ndambo had been K2,337,120 higher than the level that had been communicated to the donors.
The report further revealed that ineligible payments of at least K1,494,615 had been made to or for Jambo Tracking, an entity belonging to Mr Ndambo and his wife.
The amount includes the equipment purchase of K98,100 and the vehicle tracking costs of K1,396,515. Mr Ndambo and his wife are directors and partners of the company.
The report found the process of appointment of Jambo Tracking did not comply with basic tender procedures.
According to ZNFU, most of the documentation related to Jambo Tracking were missing due to a Drug Enforcement Commission (DEC) investigation.
The report also revealed that the employment contract for the ZNFU executive director (Mr Ndambo) was signed 20 months after the contract period of March 2012 to February 2016 started. According to the contract, ZNFU agreed to pay Mr Ndambo a monthly net salary of US$15,000.
“According to ZNFU the net salary has been processed so that the executive director has received the net payment of USD 15,000. Thus, the gross salary of the executive director has been USD 23,077. In addition, the executive director is entitled to a gratuity of 25 percent which means that the monthly salary level is USD 28, 846,” read’s part of the report.