MP queries why GMB is investing $30 million in a stock feed plant when it cannot fulfill its mandate

Gutu North Member of Parliament Ticharwa Madondo says he does not see the logic in the Grain Marketing Board spending $30 million on the construction of a stock feed plant when it is failing to fulfill its primary role of maintaining the country’s strategic grain reserve.

“This will only make sense if government specifically requested the board to come up with strategies that ensure that it becomes self-sufficient. The $30 million would be better utilised towards the rehabilitation of silos that are no longer functioning and the acquisition of tarpaulin and other grain storage facilities,” he said.

Madondo was contributing to the debate on the GMB audit reports which showed that the parastatal had failed to maintain a strategic grain reserve of 500 000 tonnes of maize and cash to buy 436 000 tonnes. The condition of its silos was also deteriorating.

The audit said that the GMB’s commercial activities were not contributing anything to the parastatal which relied on the government for funds.

Madondo also questioned the suitability of the GMB’s financial director.

“I also have concern on the finance director that his competence becomes questionable if he is not aware of the fringe benefits on disposal of motor vehicles by employers to employees,” he said.

“There must be a nil tolerance for report items raised by external auditors that recur over years. This should have a bearing on the finance director’s continued employment or in view, the finance director has to be sensitive if issues are raised by virtue of his qualification, one has to be very much concerned about that.”

Full contribution:

HON. MADONDO: Thank you Mr. Speaker Sir. I rise to support the report by the Public Accounts Committee. From my observation, it is also my concern, if you look at the feed plant, their proposal that there appears to be little logic in spending $30 million on the construction of a stock feed plant, yet GMB is failing to fulfill its primary strategic grain reserve mandate. This will only make sense if Government specifically requested the board to come up with strategies that ensure that it becomes self-sufficient. The $30 million would be better utilised towards the rehabilitation of silos that are no longer functioning and the acquisition of tarpaulin and other grain storage facilities.

I also have concern on the finance director that his competence becomes questionable if he is not aware of the fringe benefits on disposal of motor vehicles by employers to employees. There must be a nil tolerance for report items raised by external auditors that recur over years. This should have a bearing on the finance director’s continued employment or in view, the finance director has to be sensitive if issues are raised by virtue of his qualification, one has to be very much concerned about that.

Furthermore, if they are having failures in their initial projects on the commercialisation side, and they now want to go on another plant for $30 million without procedures, then it becomes a worry of concern. I am concerned with the network up time. Operating in a manual accounting environment increases the risk of late or non-detection of fraud exponentially. All depots must consistently have electricity and network without exception. It is critical that backup power and depots are connected.

Their independence and objectivity must be assessed to ensure that they are at liberty to report on any matter, regardless of its sensitivity. Internal audit must also be assessed to ensure that all matters reported by external auditors would have been previously reported. It is also a worry if we have internal auditors who cannot pick things which are part of their day to day work yet they are picked by external auditors. One then wonders whether they are qualified to be auditors of the Grain Marketing Board (GMB).

On the stop order forms, incomplete forms are a red flag for fraud. This is because it is most likely that personnel would have intentionally colluded with respective clients to leave out the value so that there is no supporting documentation to prove liability.

One of my concerns is the board of directors. Legislation must be put in place for directors who do not uphold their fiduciary duty to act in the best interests of the company, be it public or private. Such directors should be blacklisted from being a director within that set up or any other entity. Appointment onto the board must be based on a minimum acceptable education and experience as a qualification. Directors’ fees must not be material to the extent of impairing objectivity of non-executive directors’ independent judgment.

You would realize that these board members oversee management of a parastatal. If that parastatal collapses, the same board member goes on to join another board or he/she sits on a number of boards without any accountability checks on that person. Why are we leaving that to continue happening to such an extent? I get to worry on the role of Parliament. I think councillors might be doing better than us because they come up with resolutions which they follow up. With Parliament, I sometimes wonder why we leave these things happening for so long.

Here we are seeing a scenario where a board was appointed and is still in existence against the Act of the GMB. It is therefore important for us to be very sensitive to those areas because a number of people are suffering. A good example is that; if a farmer from a rural area is receiving his dues late due to mismanagement by officials at GMB and we leave them to continue running the parastatal, what are we trying to achieve? I think that as Parliament, yes, we have refused to come up with a committee that will make things work for Parliament, but I think we have to reconsider that. I thank you.

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