Contracts freeze
President Lazarus Chakwera’s administration has suspended contracts government recently awarded to pave the way for an investigative audit.
In a memo dated June 30 2020, new Chief Secretary to the Government Zangazanga Chikhosi advised all heads of ministries, departments and agencies (MDAs) about the development.
“The temporary suspension is made in order to carry out a quick audit of prospective contracts, to ascertain a number of things, including the transparency and credibility of the processes and procedures followed and decisions made,” reads the communication from the Office of the President and Cabinet.
The letter also asked the controlling officers to go through the Chief Secretary before awarding any new contract.
The development comes amid speculation that in the run up to the court-ordered June 23 fresh presidential election which ushered in Chakwera, some multi-billion kwacha contracts were approved allegedly to the benefit of some unknown government officials; hence, the move by the new administration to institute an audit.
In its Procurement Prior Review Report, the Public Procurement and Disposal of Assets Authority reported that “just before” the fresh presidential election in June, 81 contracts valued at K52 billion were approved and that in May another lot of 93 contracts worth K22 billion were also approved.
The recently-approved contracts include construction of the controversial Mzuzu Youth Centre and stadia for private football clubs—Nyasa Big Bullets and Be Forward Wanderers in Blantyre—as well as construction of a Olympic standard swimming pool at Kamuzu Institute for Sports in Lilongwe in readiness for African Union Olympics in 2022.
But in an interview last night, Ministry of Youth, Sports and Culture Principal Secretary Chancy Simwaka said he was not clear whether the memo from the Chief Secretary talks about prospective contracts or those already awarded.
He said he understood the memo as having advised MDAs to engage with the office of the Chief Secretary to seek clarification.
Simwaka said for stadia projects, a contract was awarded and contractors were already on site while for the Mzuzu Youth Centre and the swimming pool procurement was in progress.
A letter from PPDA dated June 30 2020 indicated that the authority had granted a go-ahead to the Ministry of Youth, Sports and Culture to award the K19 billion Mzuzu Youth Centre project. The no-objection letter coincided with the communication from the OPC also issued on the same day.
The OPC communication comes days after the Anti-Corruption Bureau (ACB) asked Treasury to provide details regarding payments made to anyone from June 1 2020.
The ACB also issued another instruction prohibiting anyone from changing ownership of their lands, houses, vehicles or any assets without the bureau’s vetting.
Reacting to the communication from both ACB and OPC, one senior government officer said the new administration had knowledge that some contracts were dubiously awarded and expedited to benefit certain individuals; hence, undertaking the audit.
Said the official from OPC: “If there was nothing wrong there was no need to spend money and time to look into the contracts. There is serious and genuine suspicion.”
The source said the audit exercise would review some contracts recently approved, but not yet awarded and those under execution “on which there is sufficient suspicion to do an audit”.
Procedurally, all contracts from MDAs, legally referred to as procuring and disposal entities (PDEs), are required to go through the PPDA which grants a go-ahead.
Further to this, all high-value contracts go through the Government Contracting Unit in the OPC and ACB for vetting.
Thus, the proposed audit raises a serious question on the role of relevant authorities tasked with the responsibility to vet contracts.
When contacted last evening, PPDA director general Elias Hausi said he was yet to see the Chief Secretary’s circular; hence, could not give an informed response.
However, he indicated that the issue to do with fraud in contracts can be better handled with relevant authorities such as ACB and sometimes Ministry of Justice and Constitutional Affairs that vet contracts.
Said Hausi: “Our role is to look at procedures. If the contract has followed procedures in line with the law, we grant a no-objection. If not, approval is withheld. So, we are not everything in this game; we have other agencies that have a role to play.”
On whether the OPC-sanctioned audit was a vote of no confidence in his institution, ACB director general ReyneckMatemba said the OPC circular had not specified targeted contracts.
“We only look at specific contracts; high-value contracts and single sourcing. I wish we had a list then I could easily tell which ones we handled or not. But we welcome the audit initiative,” he said.
