Thursday, August 16, 2007

Auditor-General 2005 Report on ZAMBIA WILDLIFE AUTHORITY...

Note: During this period, the senior officers of the Zambia Wildlife Authority were:
Director-General: Hapenga Kabeta;
Director of Finance: Tom Mushinge; 
Director of Conservation: Gershom Chilakusha




The Zambia Wildlife Authority (ZAWA) was established under the Zambia
Wildlife Act, No 12 of 1998. Its functions include among others to:

a) provide for the establishment, control and management of National Parks
and for the conservation and enhancement of wildlife eco systems;

b) provide for the establishment, control and management of Game
Management Areas;

c) involve local communities in the management of Game Management Areas

d) provide for the regulation of game ranching;

e) provide for the licensing of hunting and control of the processing, sale,
import and export of wild animals and trophies.


According to the provisions of the Act, ZAWA is managed by a Board of Directors
consisting of eighteen (18) board members appointed by the Minister drawn from
the private and public sectors for a tenure of three (3) years and members are
eligible for a further period.
The Board appoints the Director General, subject to the approval of the Minister.
The Director General is responsible for the administration of the Authority and is
assisted by five (5) directors in charge of Finance and Corporate Services, Research,
Planning and Information, Commercial Services and Game Management Areas,
Conservation and Management and Board Secretary. The Director General,
Directors and the Secretary are appointed by the Board for a renewable three (3)
year period.

Sources of Funds

According to the ZAWA Act No. 12 of 1998, the funds of the Authority consist of
moneys as may:
a) be appropriated by Parliament;
b) vest in or accrue to the Authority;
c) be paid to the Authority by way of fees, levy, grants or donations;
d) accept moneys by way of grants or donations from any source in Zambia
and subject to the approval of the Minister from any source outside Zambia;
e) subject to the approval of the Minister raise by way of loans or otherwise,
such moneys as it may require for the discharge of its functions and;
f) in accordance with the regulations made under this Act charge and collect
fees for services provided by the Authority.

Provisions of K4,014,617,507 were made in 2004 and 2005 respectively in the
Estimates of Revenue and Expenditure as grants to the Authority. However, the
Treasury released K7,470,000,000 and K4,572,000,000 in 2004 and 2005
respectively resulting in over funding of K3,455,382,493 and K557,382,493,
respectively. During the same period, ZAWA budgeted and collected revenue through fees,
levies and sales in addition to Government grants as tabulated below:

2003 (K’Million) 2004 2005
Budgeted Income 23,668 28,234 30,497
Actual Income 16,827 24,882 28,402
Variance (6,841) (3,352) (2,095)

As can be noted from the table above, the Authority collected revenue below the
budgeted amounts during the periods under review. It was also observed that contrary to the provisions of the Zambia Wildlife Authority Act of 1998 which stipulates, among other things, that the Authority may accept moneys by way of grants or donations from any source in Zambia and subject to the approval of the Minister from any source outside Zambia, ZAWA received a donation of K207 million in 2005 from People and Parks, an
organisation based outside Zambia, without the approval of the Minister.

Review of Operations

A review of the audited accounts and other relevant documents for financial years
ended 31st December 2003 to 2005 carried out in August 2006 revealed the

Financial Performance
a) Profit and Loss Account for the years ended 31st December 2003,2004 and 2005

 2003 2004 2005

K'Million K'Million K'Million

Income 31,582 35,933 44,124


Community share of income 20,878 3,345 4,315

Establishment Expenses 8,181 25,296 24,385

Administrative Expenses 1,949 16,008 13,451

Operating Expenses 2,311 4,539 4,584

Total Expenditure 33,319 49,188 46,735

Excess of exp. over income (1,737) (13,255) (2,611)

As can be seen above, while income rose by 39.7 % from K31,582 million in
2003 to K44,124 million in 2005, the Authority continued to incur excess
expenditure over income during the same period.
b) Balance Sheet
 2003 2004 2005

K'Million K'Million K'Million


Property, plant and equipment 10,306 12,526 12,938


Inventories 918 1,224 2,142

Receivables and prepayments 4,962 3,261 4,182

Cash and cash equivalent 12,115 20,419 11,510

17,995 24,904 17,834


Payables and accrued expenses 20,694 27,020 30,511

Bank overdraft - 17 1020, 694 27, 037 30,521

Net current liabilities (2,699) (2,133) (12,687)

TOTAL ASSETS 7,607 10,393 251

Capital employed

Capital grants 10,154 8,894 10,243

Revaluation surplus 3,506 3,506 3,506

Accumulated funds-deficit (7,534) (20,669) (27,033)

Deferred income 44 13, 498 8, 371

NET ASSETS 6,170 5,135 (4,913)

Non current liabilities

Retirement benefit obligation 1,437 5,164 5,164

SHAREHOLDERS FUNDS 7,607 10,299 251

As can be seen above, the Authority had net current liabilities of K2,699 million,
K2,133 million and K12,687 million for the years 2003, 2004 and 2005
respectively. This entails that the Authority would not be able to pay its liabilities
when they fell due. The liquidity position worsened in 2005.
Registration of Property to be Transferred by Government
22. According to Part I, Section 19 (1) and (2) of the Zambia Wildlife Act of 1998, any
property, rights, liabilities and obligations of the Government through the
Department of National Parks and Wildlife Service are deemed transferred to the
Authority in respect of which transfer a written law provides for registration, the
Authority shall make an application in writing to the appropriate authority for
registration of the transfer. It was, however, observed that the Authority does not hold title to its buildings
despite enjoying economic benefits from the buildings. It was also observed that the
Authority had not taken stock of its properties since its establishment in 1998.

Irregular Payment of Gratuity and Allowances

In December 2001, the Authority appointed a Director General for an initial
renewable period of three (3) years. Accordingly, in December 2004 the Authority
renewed the contract of the Director General for a period of another three (3) years
beginning December 2004. However, in November 2005, the Authority terminated the contract of the Director
General after serving for one year. According to the contract, the former Director General was entitled to, among
others, a gratuity paid tax-free at 35% of basic annual salary payable on termination or expiration of contract. To be eligible for pro rata entitlement, the Director General should have served for at least two (2) years of the contract. It was observed however, that though the contract provided for non-payment of gratuity in the event that the contract is terminated before serving two (2) years, the authority paid his full gratuity and salary for the remaining two (2) years that he had not served in amounts totalling K335,488,842.50. In addition, the former Director General was paid K215,000,000 in allowances relating to the remaining period of the contract resulting in an irregular payment of K550, 488,842 which is recoverable. In his response dated 12th November 2006, the Director General stated that this was a matter of the Board and the Ministry to address as they were the ones who knew what happened.

Un-retired Imprest

Contrary to Financial Regulation No. 186 which stipulates that special imprest
should be retired immediately after the purpose for which it was issued was
fulfilled, it was observed that imprests in amounts totalling K368, 346,544.08 were
outstanding for more than ninety (90) days as of 31st December 2005.
In his response dated 12th November 2006, the Director General stated that
recoveries are effected where amounts are outstanding for a long time and that
efforts would continue to ensure that the situation was brought to an acceptable

Non Recovery of Salary Advances

Contrary to ZAWA regulations, which stipulated that salary advances must be
recovered in three (3) months, amounts totalling K175,065,703 relating to salary
advances to 261 members of staff were outstanding for more than two (2) years
without effecting recoveries. In his response dated 12th November 2006, the Director General stated that as
regards non recovery of salary advances, officers who retired were being paid their
benefits by the Ministry, not by ZAWA. Consequently, the recovery of salary advances could not be done.

Trade debtors
It was observed that ZAWA did not have an effective mechanism of monitoring its
debtors. In this regard, amounts totalling K1,300,233,627, owed by nineteen (19)
operators who had since abandoned their projects and left the country or were
wrongly classified, could not be collected. Consequently, ZAWA management
applied to the Board to write off the debts.

South Luangwa Area Management Unit (SLAMU)

In January 1999, Government of the Republic of Zambia (GRZ) entered into an
agreement with the Government of the Kingdom of Norway regarding cooperation
for promotion of the economic and social development of Zambia to extend
continued assistance to South Luangwa Area Management Unit (SLAMU).
According to the agreement, the GRZ shall make all reasonable efforts to facilitate
the successful implementation of the project by granting the project status as pilot
within ZAWA throughout the project period and thereby:
a) Grant the project permission to retain all revenues from tourism and safari
hunting in SLNP and LGMA;
b) Allow the community based natural resources management (CBNRM)
approach to be continued; and
c) Delegate sufficient decision making authority to the project to facilitate its

Contrary to the provisions of the agreement with the Kingdom of Norway,
the following were observed:
i) In July 2004, ZAWA entered into an agreement with L and L
properties for culling of six hundred (600) hippos over a period of
three (3) years in South Luangwa Area Management Unit. Under this
agreement, ZAWA received amounts totalling K498,033,775 in
2005. As of December 2006, only K82,391,000 had been remitted to
SLAMU leaving a balance of K415,612,775 still owing.
ii) It was also observed that both SLAMU and ZAWA Head office had
been invoicing Chichele lodge based in South Luangwa National
Park. In this regard, the lodge made payments directly to head office
instead of SLAMU, as a result, records at SLAMU indicated that
Chichele Lodge owed them a sum of K523,403,066 (US $67,202)
whereas the statement obtained from the lodge showed that the lodge
was owing US$19,764 as of August 2006.
iii) It was further observed that the offices at SLAMU which were built
under the project have no title deed, and as such it has proved
difficult to insure the buildings whose roof was grass thatched and
prone to high risk of fire.

Irregular Procurement of Uniforms for Drug Enforcement Commission (DEC)

A review of records relating to the procurement of uniforms indicated that ZAWA
had procured uniforms for DEC using the Support to Economic Expansion and
Diversification (SEED) project funds in amounts totalling K46, 614,610.
A scrutiny of the SEED agreement did not provide for such arrangement. There was
no evidence of an agreement between DEC and ZAWA. As of October 2006, there
were 130 T-Shirts, 130 Combat jackets, 130 Long sleeves polo neck skippers for
DEC as uniforms in stores.

Irregular Issue of Title Deeds in Mosi-O-Tunya National Parks

According to the provisions of the Act, ZAWA allocates sites in National Parks and
Wildlife /Bird sanctuaries to successful bidders. The successful bidders are awarded
a Tourism Concession Agreement (TCA). The TCA is a commercial agreement that
regulates the conduct of the operators. It confers the rights and obligations of the
concessionaire and grantor (ZAWA). An Environmental Impact Assessment (EIA)
is prepared and approved by Environmental Council of Zambia (ECZ) before the
operator would proceed with the development of operations.
However, it was observed that two operators namely Waterfront lodge and
Maramba River lodge had been issued with title deeds in the Mosi-O-Tunya
National Park. The title deeds for Waterfront have since been cancelled and a
Tourism Concession Agreement was signed on 8th February 2005 for a period of
twenty five (25) years. As of August 2006, the title deed for Maramba River lodge
had not been cancelled and the Authority was not receiving any money from the
lodge, as there was no agreement though the lodge operated in the National Park.
Furthermore, there was no evidence of an Environmental Impact Assessment
having been done for the above-mentioned lodges by the ECZ.

Outstanding Statutory Obligations

In accordance with the Income Tax Act, Cap 323, every employer is required to
remit Pay As You Earn (PAYE) to the Zambia Revenue Authority (ZRA). During
the period under review, it was observed that ZAWA had not been remitting PAYE.
As at 30th June 2006, the outstanding PAYE stood at K19,656,327,267.
It was also observed that the Authority had not remitted pension contributions to
NAPSA for its employees in amounts totalling K3,544,973,232 as of August 2006.
The issue was brought to the attention of the Board at its 4th meeting held on Friday
16th May 2003 by the finance committee, though no action has been taken as of
October 2006. In his response dated 23rd November 2006, the Director General stated that efforts
were being made to address the matter.

Share of Community Resource

The Communities in Game Management Areas (GMA) have formed Community
Resource Boards (CRB) which comprise a registered board for the purpose of
administering the CRBs. The main sources of income for the CRB are revenue from
concession, bird and animal fees. As a way of equitably distributing the wildlife resources, ZAWA and the CRBs
recommended allocating the utilization of the resources as follows;
Chief 5
CRB 45
The funds to the CRBs are distributed as follows:
Wildlife Conservation 45
Community Projects 35
Administration 20
Board members of the CRBs are volunteers elected among the community.

Failure By CRBs to Prepare Annual Reports and Audited Accounts

According to the provisions of Part III section 5 subsections (a), (b) and (c) of the
ZAWA Act of 1998, the Community Resource Board (CRB), is required not later
than ninety days after the end of the financial year, to submit to the Authority,
through the Director General:
_ An audited balance sheet;
_ An audited statement of income and expenditure ;and
_ A report concerning its activities during that financial year.
Contrary to the provisions of the Act, the sixty two (62) CRBs did not submit
audited accounts and did not prepare the annual reports.
A review of records and other relevant documents pertaining to the operations of
Community Resource Boards revealed the following:

Chiawa Game Management Area
The Government issued a gazette number 332 in 1998 directing all operators
in the Chiawa GMA to be paying land user fees. The fees were to be paid at
the beginning of the year. However, as of December 2005, total amounts of
K450,999,935 and US$128,857 (K440,175,512) were outstanding as unpaid
land user fees for over 120 days. As of June 2006, the fees had not been paid
and ZAWA had not invoiced the operators for the year 2006.
b) Chiawa Community Resource Board
Records obtained from ZAWA indicated that Chiawa CRB received an
amount of K71,470,328 during 2005. However, a review of the bank
statements of the CRB indicated that an amount of K200,648,714 had been
received from ZAWA. No explanation was given for the variance of

It was also observed that:
i) There were no expenditure details in respect of the period from
January 2003 to June 2005 for which the Board Secretary and the
Finance Chairperson gave no satisfactory explanation.
ii) ZAWA guidelines provide that the panel of signatories comprise two
from the community and another one from ZAWA. However, it was
observed that the panel of signatories did not include officers from
iii) Contrary to the agreed guidelines, nine (9) members of the
CRB paid themselves loans ranging between K1,200,000 and
K10,000,000 in amounts totalling K38,200,000 between July and
December 2005. Though the loan agreements provided that the
loans would be recovered by June 2006 none of the money had been
recovered as of August 2006.
c) Jumbe Community Resource Board
During the period under review, Jumbe CRB received a sum of
K35,993,350 and the funds were to be apportioned as follows:
Recommended Actual
(K) (K)
Chiefs Share - 16,000,000
Wildlife Conservation 16,197,007 7,593,850
Community projects 12,597,672 7,214,500
Administration 7,198,670 5,185,000
It was observed that contrary to the guidelines, the chief was paid
K16,000,000 from the CRB funds.

In 2003 ZAWA signed a Hunting Concession Agreement with the
Mungomba Hunting Safari Company which provided for among others, the
drilling of boreholes, provision of grinding mills and the employing of five
(5) village scouts for the Jumbe CRB.
The agreement did not specify the safari operator’s obligations in terms of
quantities and values. Contrary to the concession, the safari company did not sink the boreholes
for the community, but instead only provided two grinding mills which are
situated at the chief’s palace, and the community was not benefiting from
the grinding mills as they were not accessible to the rest of the community
for which they were intended.

d) Chitungulu Community Resource Board

A review of the ZAWA field report dated 2nd December 2004 revealed that
one of the board members was given a sum of K18,000,000 paid on cheque
number 000136 to purchase a grinding mill for the community which was
not procured. As of August 2006, the K18,000,000 had not been refunded
and the matter had not been reported to the police.
It was observed that the CRB issued another cheque number 22045 in
amounts totalling K13,530,125 for the purchase of the grinding mill.

e) Mwanya Community Resource Board

During the period under review, the CRB received an amount of
K560,888,489 as community share.
It was observed that:
i) Board members of the CRB diverted funds and paid themselves
advances of K300,000 each totalling K3,000,000. The terms of the
advance were that it would be recovered by December 2005.
However, as of August 2006 the deductions had not been effected,
though the members continued to be paid sitting allowances.
ii) The Hunting Concession Agreement in the area provided, among
others, the drilling of boreholes, provision of grinding mills,
employing five (5) village scouts, employing community coordinator,
training local people to be profession hunters. Contrary to
the concession agreement, the community bought a second hand
light truck at a cost of K48,000,000 from the safari hunter. The terms
of payment were such that the community forego the drilling of
boreholes and add an amount of K24,000,000 paid on cheque
number 00050. The basis of determining the cost of the boreholes
and the valuation of the cost of the vehicle could not be ascertained.
The Safari hunter has not fulfilled the other obligations he made in
the agreement.

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