From secretaries slotting their names onto the allowance list to whole vehicles vanishing from records, the Plant and Vehicle Hire Organisation (PVHO) has been exposed by an audit which shows that millions of kwacha cannot be accounted for.
The report, termed, “An investigative audit report on Plant and Vehicle Hire Organisation,” was tendered to Chief Secretary to Government and Secretary to the Treasury, among other high offices, by the National Audit Office on 15 November 2011 with a reference tag: MWS/42/1/17/ 2010.
The audit covered the 2008/09 financial year but some parts of 2005/2006, 2006/2007 financial years and July to August, 2009 were also covered.
“It is evident from the findings highlighted in the report that the system of controls and compliance with rules, laws and regulations were not effectively operated and enforced,” concludes the report.
Stale cheques such as cheque number 002067 dated 21 October, 2008, amounting to K315 443.42 (about $1 261 at the current exchange rate) from Northworks Limited was still not yet banked or receipted as of 31 August, 2009.
Contrary to government standards on public auctions, systems were grossly abused, with some bidders collecting items without completing payment or without payment at all and some PVHO employees appearing on all lists of auctions conducted across the country.
The auctioneers were paid full commission despite some items being taken for free while other items were sold secretly without declaring them in press releases.
“As at the date of audit, K3 905 200.00 (about $15 620) was outstanding from the auctions which were conducted between 24 June, 2008 and 4 May, 2009,” reads the report in part.
The organisation also failed to produce the general receipts book for inspection despite receipts issued between 22 May, 2007 and 5 June, 2009 showing that about K67 million (about $268 000) worth of vehicles were disposed of and released to successful bidders.
PVHO was also faulted for its bad debt collection skills.
“As at 30 June, 2009, the estimated outstanding debts on hire charges were at K56 970 158.79 [close to $240 000],” reads part of the report.
Ironically, there was no evidence that demand notes were served to the debtors, some of whom are PVHO employees.
There was also under-billing, with some private organisations being charged government rates while other organisations were deliberately undercharged, leading to about K2.5 million (about $10 000) being lost.
Some findings were trivial but all the more suspect, like money raised in Mzuzu being banked in Lilongwe, exposing it to all kinds of risks besides meeting transport and allowances for the people ferrying it.
But management said they did this to avoid the delays created by the absence of a central bank in Mzuzu.
PVHO also constructed a helicopter pad at the State House in Blantyre to a tune of K11.5 million (about $46 000) but never sent an invoice to anyone. During the construction, up to half a million kwacha allowances were paid to the operators although they were operating within their duty station.
The operators never filled any log books during this period.
The list of issues goes on: some items were being sold and released without release notes and some release forms issued to different buyers were quoting the same general receipt number upon payment.
Payments of over K5 million (about $20 000) were made during the audited period without authorising and countersigning signatures and a further K18 million (about $7 200) made without supporting documentation, breaching Treasury instructions and making the authenticity of the transaction questionable.
“Cheques amounting to K36 147 806.09 (about $145 000) were issued between July, 2008 and June, 2009 without the support of the payment vouchers,” adds the report.
Still on bad payment, some payment vouchers were paid (about K4.2 million) in the months of October and December 2008 but were stamped with a September 2008 date stamp.
The comedy of errors continued at PVHO, with some employees getting advance payments but no deduction being effected almost a year on.
“It was noted that three officers namely, Mrs A Mhango, Mrs E Nhlane and Mrs C Holla were frequently drawing honoraria. The three names were appearing on almost every payment voucher in respect of honoraria payments…whenever any head of the department submits a claim to the Director for payment approval, the three ladies would retype the claim, slot in their names and sign the loose minute on behalf of the departmental head,” reads the report.
Poor car log books
According to the report, the company also hired vehicles from its members of staff and paid heavily despite the claims not being substantiated as no log book was filled.
The auditors noted that accounting personnel were not staying for more than a year at PVHO headquarters before being posted away and that some accounting transactions were being conducted by technical personnel who are not conversant with accounting procedures.
PVHO director Simon Namuthuwa said on Thursday the organisation is on course to ensuring fiscal discipline.
“We are now sending people for accounting training such that we have qualified accountants nowâ€¦what the audit report recommended is being done,” said Namuthuwa, “we are now on course [to achieving fiscal discipline].”
Asked if anyone has lost their jobs over the issues highlighted in the report, Namuthuwa was non-committal, but said those who received advances are now being deducted and that public auctions are now procedural and open.
Other issues in the report
â€”No debt collection policy as of 2009 with K54 million (about $216 000) uncollected
â€”Over K2 million (about $8 000) lost due to undercharging
â€”Cheques of over K36 million (about $144 000) issued without supporting payment vouchers.