A local unit of an international audit firm engaged by the Zambian government to audit payment arrears relating to road contracts that has been alleged to also involve an audit related to defense and security wings has refused to comment on the question of whether the contract is valid and passes the legal test.
PricewaterhouseCoopers – PwC has been contracted by government to audit arrears on road contracts, a situation which has raised concerns with some governance stakeholders calling for full disclosure as to whether the right legal procedure was followed on the awarding of the audit contract.
Government throught the Minister of Finance stated that audit firms were engaged to verify domestic arrears are Grant Thornton – GT which has been assigned to audit arrears related to goods and services, PriceWaterhouseCoopers – PwC was awarded a contract to audit arrears related to road contracts and Ernst Young – EY was awarded a contract to audit fuel arrears.
And when contacted by the Zambian Business Times –ZBT, PwC Country Senior Partner Andrew Chibuye said he could not comment as the firm does not comment on such issues. “There is an authority that you can call that can comment, we don’t comment on these matters. There is the authority that has given a statement [Ministry of Finance]”.
Concerns were raised in parliament by mostly opposition members of Parliament who even resorted to walking out that Zambia risked its national security by engaging foreign owed or foreign associated privately owned audit firms that may end up passing on sensitive information to their foreign associates.
However, the ruling party insiders told ZBT that the opposition is against the engagement of private audit firms because they conducted some illegals deals during their time in government through that defense and security wings, and that they are afraid of the revelations that will follow.
Legal experts have told ZBT that audit firms risk losing their reputation and standing as they seem to have been caught up in some kind of political and now legal battle. They need to seek independent legal opinions and clear the air as staying quite and not safeguarding their reputation risk being misconstrued by some sections of society.
According to the Law Association of Zambia, the Auditor General can only appoint an external auditors to audit the defence forces where circumstances of an audit justify such sub-contracting, with the prior written consent of the President, authorizing access by external auditors.
In a statement seen by ZBT, LAZ President Lungisani Lungu said this is provided for under section 73(3) of the Public Finance Management Act, No.1 of 2018 and the pre-conditions are meant to safeguard national security.
Lungu stated that it is LAZ’s considered position that the subcontracting of external auditors to audit the defence forces is legal if it was done by the Auditor General following the President’s prior written consent. The confirmation that prior written consent by the Republican President is yet to be made public.
The LAZ president further stated that the Auditor General is required to satisfy the President that national security would not be compromised by the access, before the President can grant such written consent.
Other firms engaged are local and include CYMA chartered accountants that will audit arrears related to Farmer Input Support Program – FISP, Mark Daniels will audit Value Added Tax – VAT refunds and Client Focus will evaluate awards and compensation.
A source at the Office of the Auditor General – the institution that is mandated to audit government accounts by law said it’s not correct to insinuate that the office is not capable of conducting these audits. Auditor General Dick Sichembe is yet to issue a comprehensive statement on the matter to help clear the air.
