How Covid funds were looted

MASERU – An internal audit report prepared by the Ministry of Finance for the 2019/20-20/21 financial years has exposed how a staggering M689 million was squandered under the guise of fighting Covid-19.

The report, which was released on July 14, 2021, only came to the public’s attention this week. It paints a damning picture of how rogue individuals and companies exploited opportunities brought about by the Covid-19 pandemic to enrich themselves.

The report says there “were inadequate internal controls in implementing Covid-19 activities”. It also points at how some individuals and private companies willfully violated the government’s procurement regulations.

The report also highlights what it says was the “unnecessary and inappropriate acquisition of some goods and services”.

It says while the goods and services were acquired as part of the Covid-19 expenditure, their “necessity and appropriateness are questionable considering the magnitude of their contribution to the pandemic”.

It cites the rental of gas heaters and gas for the LNCC halls, for M900 per day. The report also documents cases of what it says was wasteful expenditure by individuals for rental of office space, accommodation and meals for Nacosec staff.

It said the National Covid-19 Secretariat rented Avani Maseru Hotel for office space, accommodation and meals for its deputy CEO without a contract agreement. The requisitions and purchase order were prepared and signed retrospectively, three to four months after services were rendered.

Nacosec went on to acquire “two rooms for accommodation and meals” for its deputy CEO at a cost of M1 622 per room raising questions as to “why two rooms were rented and how the tenant occupied both of them”.

The report says prices charged on some goods and services provided seemed to have been overstated, exaggerated or inflated significantly. These include thermos scanner and fogging machines, tents, park homes, site excavation and floor structure services, water tanks and hospital electrical beds.

“Park homes were also charged ridiculous prices of between M1, 000, 000 and M1, 600, 000 each, amounting to over M9, 500, 000 for the 6 park homes, while the original budget for each park home was estimated at M250, 000 totalling M1, 500, 000,” says the report.

With the amount spent on the construction of park homes for the six border posts, better and existing labs could have been refurbished or proper building structures could have been built, says the report.

Most of the funds available were squandered on catering and allowances for the staff involved in Covid-19 activities and not core activities to curb the spread of Covid-19, the report says.
The report also points to what it says is the “high staff complement at Nacosec”. These public officers got allowances that ranged from M2 000 to as much as M30 000 each between December 2020 and March 2021 totalling M1 711 314.00.

“It is not clear how the rates of these allowances were determined, how they were approved and by whom,” it says.

The whole staff structure at Nacosec which was from outside the civil service was deemed to have been “too big, duplicative to Disaster Management Authority (DMA) positions and functions and too costly to the budget”.

The report says “controls surrounding the Covid-19 initiative are unsatisfactory with regards to safeguarding of assets, compliance with rules and regulations, accomplishment of objectives for the best interests of the government of Lesotho”.

The report says most of the suppliers of some goods and services that appear to be key were not properly engaged following proper procurement procedures.

These services include catering, transport and quarantine facilities with contract agreements being prepared and signed retrospectively as the services were already rendered.

For instance, in one incident, a catering service was engaged to provide catering services to ministers and government officials at the LNCC by a letter indefinitely which was not in line with procurement regulations.

It says top officials seemed to have been the ones engaging service providers. For instance, at the district level, some District Administration officers seemed to be the ones assuming procurement roles.

In some instances, newly registered businesses were awarded contracts to provide goods and services under Covid-19. It reveals that VRC Medical & Laboratory Equipment and Supplies, registered on 27 January 2020, supplied 19 test kits per box of 20 x 100, making it 2 000 rapid test kits for over M1.2 million.

Another newbie was Lipitseng Snack Bar & Catering, registered on March 1, 2020 which provided lunch for 172 police officers for M120 400. The third new company was Sthalala Catering which was registered on March 1, 2020 and provided lunch for 215 police officers for M150 500.

The fourth one was Thana Holdings (Pty) Ltd, which was registered on June 1, 2020. The company provided dinner for 80 police officers for M56 000. These three meal supplying companies provided the services for seven days at the most.

In another incident the auditors found that fumigation services which were claimed to have been rendered by Movement Ltd at the Farmers Training Centre (FTC) in Thaba-Tseka were never given.

“There was no such service rendered by any supplier at the Centre,” the report reads.

“Rather, the Centre used its cleaners for cleaning the area using ordinary cleaning material,” it says.

Staff at the FTC including the administrator and cleaners and also the district’s Ministry of Health, were not aware of such service as people responsible for Covid activities in the facility. The fumigation cost amounts to M126 000.

“There is possibility of collusion for intentional defrauding of Government of Lesotho funds,” the report reads.

Refiloe Mpobole