Audit exposes ‘Apumbwa’ in K9.3bn abuse: Misprocurement at Escom, Admarc

Electricity Supply Corporation of Malawi (Escom) and Agriculture Developmeny and Maeketiv Corporation ( Admarc ) are again in the spotlight for abuse of public resources as Auditor General’s report show the two State-owned institutions abused K9.3 billion through doggy procurement transactions.

The audit report of the fiscal year 2016/17  – prepared by former Aiditor General Stevenson Kamphasa – indicate that the two State enterprises failed to account for the billions of Kwacha.

Escom mess

It indicates that Escom ordered goods valued at  K8.3 billion from about 23 suppliers without following internal procurement procedures and without the knowledge  of key management .

“Out of the K8.3 billion ordered items, the Corporation only needed K3.2 billion of the items ; rendering the remaining K5.1 billion useless,” says the report on part.

The power utility continued to acquire the old three-phase meters despite embarking on a project to migrate customers from post-paid to prepaid  billing through introduction of meters mounted on electricity poles to phase out the old three-phase system, according to the findings of the audit.

“A total of 24 550 meters valued at K1.8 billion were received in March and April 2019, But only 330 items valued at K23 million were issued from stores in the last 12 months to June 2017,” reads the report.

Escom board chairperson Thom Mpinganjira told a news conference recently that  “there were serious misprocurement process” at the Corporation.

Admarc rot

The report indicates that  Admarc failed to express to the auditors the whereabouts of K4.2 billion which it had claimed was used to purchase maize and other items in the year under review.

There was no proof from the State produce trader on the delivery for the saud maize and other items, the audit says.

“The auditors were unable to obtain sufficient and appropriate audit evidence to ascertain that quantities relating to purchases valued at K3 billion were fully received.

“Included in the cost of sales is an amount of K1.2 billion that could not be explained by management,” reads the report.

Parastatal ‘abominations’

An editorial comment in Malawi’s leading daily newspaper, The Nation, has focused on the story, staring that the abominations that most State-owned institutions such as Escom and Admarc continue to commit are not only unfair to taxpayers who shoulder the costs of the wrong decisions, but also to the people of Malawi who are denied  good services because of wrong procurement.

“How can Escom throw away K5.1 billion due to wrong procurement when the country is struggling to buy food, drugs and fuel for ambulances in public hospitals?”  the paper queried.

It pointed out that it is saddening that there is little or nothing government is doing to bring sanity in these institutions, by, among other things, prosecuting the controlling officers.

“Why does government treat employeees who abuse public resources  with kid gloves? Surely, there is more to these wrong deals than meets the eye,” the paper said.

The paper  urges government to “immediately stop the laxity” in State owned institutions such as Escom and Admarc, warning that, if left unabated, the looting will continue to derail the country’s development agenda.

 

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