By Ntombi Mhlongo
An audit into the Strategic Oil Reserve Fund has unearthed that there was an overpayment of about E400 000 in travelling and capacity-building expenses.
In the audit report for the year ended March 31, 2022, it is stated that McGregor Blue Investments, a consulting company engaged by the Ministry of Natural Resources and Energy for the review of the basic fuel pricing methodology in the Kingdom of Eswatini, was allegedly overpaid by a total amount of E400 500.
The report says the consultant was paid E150 000 for travelling expenses instead of E37 500, thus resulting in an overpayment of E112 500.
Similarly, the consultant was also paid E360 000 for training and capacity-building Expenses instead of E72 000, thus resulting in an overpayment of E280 000.
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Auditor General Timothy Matsebula said the main cause for the overpayments appeared to be negligence and lack of due care by responsible ministry officials which led to the endorsement of a defective contract.
According to a breakdown of the contract between the Ministry and McGregor Blue Investments, under “breakdown of remuneration”, reimbursable travelling expenses were supposed to cater for five people at a unit cost of E7 500.
However, the total cost was erroneously stated as E150 000 instead of E37 500. Similarly, reimbursable training and capacity building costs were supposed to cater for three weeks of training at a unit cost of E24 000. However, the total cost was erroneously stated as E360 000 instead of E72 500.
“I raised my concern that the contract may have not been submitted to the Attorney General prior to its endorsement. Further, the overpayment resulted in value for money not being attained and furthermore, financial losses could be incurred if the funds were not recovered or recovered at additional costs.”
“I also highlighted the possibility that the totals may have been intentionally inflated in order to fraudulently embezzle government funds. I advised the controlling officer to always ensure that the money spent matches the value derived from the service provided,” he said.
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The AG added that he further advised that contracts should be vetted before endorsement to ensure that errors are duly corrected and that the overpaid amount should be recovered, and necessary action was taken against those responsible.
Matsebula said in response, the controlling officer (Principal Secretary in the Ministry of Natural Resources and Energy) stated that the consultant was paid as per the contract total cost of E510 000 (E150 000 for travelling to and from Eswatini for the consultations and E360 000. for the training of the nominated personnel for the Ministry) as per the total costs reflected in the contract for these activities.
“The controlling officer also directed me to the Financial Proposal of the consultant which was the basis for awarding the tender. The controlling officer’s response is noted. However, it does not address the defect in the contract whereby the totals were not a product of the unit cost and quantity. Also, the contract is the binding document and not the consultant’s Financial Proposal. The matter, therefore, remains reportable,” said the AG.
