LCC overpaid Stoutone for ticketing office construction at Intercity – AG

THE Auditor General’s report has revealed that Lusaka City Council overpaid K933, 108 to Stoutone Investments to construct phase one of the ticketing office block at Intercity Bus Terminus at a contract price of K6, 798, 391.


The latest report of the Auditor General on the review of operations of local authorities for the financial years ending 31st December 2013, 2014 and 2015 stated that the largest city council in the country also engaged in irregular sale of assets and failure to collect property rates.


It also stated that during the period under review, the council had uncollected rental revenue amounting to K772, 340, as of June 2016.


“In October 2012, the council engaged Stoutone Investments to construct phase one of the ticketing office block at Intercity Bus Terminus at a contract price of K6, 798, 391. The contractor had completed most of the works with only the plumbing and associated outstanding. However, the contractor was paid amounts totalling K7, 731, 499 resulting in an overpayment of K933, 108 which had not been recovered as of December 2016,” the report stated.


The report further stated that procedure was somewhat disregarded in the manner the Libala tennis court was sold.


“Section 67 of the local government Act No. 22 of 1995 states that a council may sell, let or otherwise dispose of any property of the council provided that, where the council intends to sell a council asset, the council shall before conducting the sale, cause a valuation of the asset to be carried out by the department of the government responsible for property valuations or by a valuer approved by the Minister [of Local Government].  A review of records at the council revealed [that] in May 2015, the council sold Libala tennis court (stand B/PN20435) at a price of K12, 150, 000. However, contrary to the provisions of section 67 of the local government Act, the property was not subjected to a valuation. Consequently, it was not possible to ascertain whether the property was sold at a fair price,” stated the report.


The disposal of plots along Mwatusanga road in Woodlands area was also highlighted in the report.


“On 30th December, 2014, the council resolved to dispose off 16 pieces of land along Mwatusanga road in Woodlands, Lusaka. Instead, 36 pieces of land were disposed off from which amounts totalling K12, 923, 888 had been realised as of December 2016. In this regard, the disposal of an additional 20 pieces of land was irregular in that there was no authority from the council,” the report disclosed.


Other anomalies the Auditor General’s report cited on Lusaka City Council were failure to produce audited financial statements, failure to pay retirement and terminal benefits, failure to remit statutory contributions and failure to supply elevators at the civic centre.


The report shows that K67, 058, 919 was not remitted to the Zambia Revenue Authority (ZRA), K21, 536, 941 to the National Pension Scheme Authority (NAPSA) and K188, 139, 185 to the Local Authorities Superannuation Fund (LASF), translating into an aggregate amount of K276, 735, 045.

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