Agricultural Development and Marketing Corporation (Admarc) former board chairperson Alexander Kusamba Dzonzi has recommended forensic audit to establish the extent of fraudelent activities, saying money lost is in billions of kwacha.

Speaking when he appeared before the joint parliamentary committee on issues of misprocurement and mismanagement of public resources, Dzonzi stressed that the mismanagement of resources at Admarc is very serious and deep-rooted.

The board recently approved an investigative audit covering the period from June 1 2020 to March 31 2022 to trace any elements of fraud.

The audit, carried by Graham Carr, established that almost K330 million was lost in fraudelent activities to do with motor vehicle insurance, medical aid scheme money, staff loans and dunnage poles.

Dzonzi yesterday said fraudelent activities date back to 2002 and money lost is in billions of kwacha, adding there is need for a forensic audit to uncover all fraudelent activities and take suspects to task.

Kusamba Dzonzi: Mismanagement of
resources is deep-rooted

He aaid: “There is need for a 100 percent audit. The rot at Admarc started way back in 2002.”

The former board chair revealed that the direction that the former board would have taken was to have a forensic audit starting from 2002.

He said the recent audit did not cover all employees, which may mean that more money was lost.

In the abuse of the medical cover scheme that saw about K36.6 million being abused, the auditors only used a sample of 274 out of 3 296 employees.

The medical cover saw people that are not eligible for the scheme being covered. The audit also established that K39.5 million was paid for personal vehicles of Admarc employees. The money lost is yet to be recovered.

Asked if Admarc has a vehicle insurance policy for employees, Dzonzi stressed that currently there is no policy for insurance for employees and the K39.5 million payment for personal vehicles of employees was done fraudelently.

Admarc uses conditions of service of April 1 1996 and there is no such policy for vehicle insurance of employees. New conditions of service that were worked on have not been approved by government.

Admarc also paid K18.8 million for non-runner vehicles while about K453 000 was paid for insurance of Ocean Car Hire vehicles which, surprisingly, were already insured.

It was further eatablished that Admarc was also duped of K37 million through dubious payments for dunnage poles.

Admarc general manager Rhino Chiphiko concurred with Dzonzi that there is need for a comprehensive audit to cover a longer period. He said such malpractices have been happening for a long time.

“There is need for forensic audit. But then we should not focus on a very long period because the challenge could be that some people have left the system or have died. So we should also look at the value for money,” said Chiphiko.

He said his goal is to see things improve at Admarc, adding he was the one that initiated the recent audit after noting anomalies.

“Despite there being no policy for private vehicle, it was a tradition that had been there for a long time,” said Chiphiko.

He added that Nico Gene r a l Insur anc e Company, which insured the vehicles, should refund the money that was paid to it in the insurance scheme fraud.

“They were sleeping on the job. They should refund the money,” said Chiphiko, adding all those involved will be brought before a disciplinary hearing.

Chiphiko, who is on suspension and did not appear before disciplinary hearing within 14 days, also told the parliamentary joint committee that he had a sour relationship with Dzonzi as board chairperson.

He claimed that Dzonzi wanted to be making decisions for the general manager, adding that the board he worked with did not have a proper vision for Admarc.

Said Chiphiko: “Admarc needs a board that will help take it to greater heights.”

In his meeting with the committee on Wednesday afternoon, Nico General Insurance Company chief executive officer Donbell Mandala said the company provided insurance for non-runner vehicles, personal vehicles and vehicles for a Car Hire company because

 that is what Admarc had asked for.

“We trusted Admarc on the information it provided for the vehicles it wanted insured. Nico could not question Admarc on the cars it wanted insured,” he said.

However, Mandala has since committed that Nico General Insurance Company will refund the money that Admarc paid for the questionable vehicles.

He further said Nico General Insurance will tighten systems to ensure that property being insured by government institutions is properly checked just like other institutions and individuals.

Committee co-chairperson Gladys Ganda said insurance companies should help government in protecting public resources.

She said the committee will be interested to know all those involved in the fraud and to see them taken to task.

Admarc has been struggling for years and has been making losses. Government is in the process of restructuring the State grain trader to improve its operations and performance

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