An immediate forensic audit should be conducted at the Agricultural Development and Marketing Corporation (Admarc) , Auditor General has recommended after an audit report for the year ended June 2018 revealed that the State produce trader could not give evidence on the purchase of items amounting to K3 billion.
The Auditor General Thomas Makiwa has described Admarc – which sought a K45 billion bailout from central government a loan it was failing to service with a commercial bank – as a high risk parastatal requiring immediate review and enhancement.
“I, therefore, recommend that a forensic audit of a high risk parastatal be conducted as soon as possible,” Makiwa said in his report submitted for tabling in the National Assembly.
He also recommended that the “governance arrangement, roles of top management and their performance should be assesses, especially for the period under review.”
The audit for Admarc financial statements for the financial year ending June 30 2018 was done by Deloitte on behalf of the Auditor General in line with Public Audit Act.
It reveals that the State produce trader does not prepare bank reconciliations on a regular basis despite the best practice requiring the parastatal’s bank reconciliation to be prepared on a monthly basis as a minimum.
“The entity could not provide us with basic reconciliation for the months of July 2017 to May 2018 for several bank accounts held at different banks,” reads the report in part.
“It appears that in the entire year ended 30 June 2018 the entity only prepared bank reconciliation for the month of June 2018 for external audit purposes.”
Among other things, National Audit Office (NAO) report indicated Admarc has been entering into contracts with farmers without specific recovery period, non-compliance with procurement procedures, non- remittance of pension contribution as well as non remittance of pay as you earn (PAYE), fringe benefits tax as well as withholding tax.
The audit report further reveals that the bank accounts owned by Admarc were not recorded in the general lodger as at 30 June 2018.
The parastatal owns FDH Bank account which has K58 666.40 and Ecobank savings account which had K2. 263.29.
“We only came to know about the bank accounts through bank balances confirmation letters which we received for audit purposes from the banks where the account are being held,” reads part of the report.
The acting chief executive officer for Admarc, Felix Jumbe, admitted he found the entity in a mess and that the parastatal has been addressing most of the issues and is trying to rebuild to ensure profitable operations.
In the 2020/21 National Budget which was later withdrawn after change of government following the June 23 presidential rerun, former Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said Admarc was allocated K10 billion for the purchase of maize, legumes and cotton.
He had also allowed Admarc to borrow from commercial institutions.Follow and Subscribe Nyasa TV :