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PVHO says a K180 million debt owed by government institutions and private companies has crippled the organisation to the point of failing to pay salaries and creditors.
The organisation is also failing to replace vehicles, buy spare parts or workshop tools, resulting in the grounding of over 50 vehicles and failure to generate revenue.
Acting Controller of PVHO Ellison Katambo said government institutions are failing to settle long-standing debts of over K90 million while private companies are defaulting on over K80 million.
“These debts have affected us in a big way. We are really struggling. Even our revenue generation base has been affected because we are failing to meet the market demands since most of our vehicles and equipment have been affected,” said Katambo.
He attributed the debts to flouting of procedures for hiring out vehicles by staff and to “refer to drawer” cheque payments by some contractors.
“We should have made sure that they paid in full before allowing them to hire more vehicles and equipment which is the normal practice,” said Katambo.
He said some debts were accumulated due to what he described as an element of “negligence” by some of their officers, saying “the procedures are clear and [all this] should not have happened”.
“Follow-ups were not done in time,” he said.
Katambo said some officers involved in the malpractice were interdicted while two others were referred to police.
The acting controller said the big debtors include State House (K33 million), Ministry of Finance (K13 million), Transport (K13 million), Vice President's Office (K8.8 million), Foreign Affairs (K5 million), Electoral Commission (K5.2 million) and National Assembly (K1.5 million).
He said most of the debts, some dating back to 1998 and during the campaign period in 1999 and last year, were incurred in hiring vehicles such as lorries and 4x4s and stand-by generators which were used for state functions.
Katambo said PVHO has engaged the Office of the Attorney General to recover the money from the private companies. Some, he said, have started paying while those resisting are being dragged to court or having their assets confiscated.
He said the case of government institutions has been referred to Treasury because PVHO cannot fellow government departments to court.
Katambo said to avoid repeating the mistake with private companies in future, his organisation has drafted an agreement with the National Roads Authority (NRA), one of the financiers of contracts, to deduct contractors at source before they are paid.
He said a similar arrangement will made with other funding institutions such as the European Union/Malawi Government Public Works Programme and Ministry of Finance, who also fund most contracts, to ensure money owed to PVHO is deducted at source.
Ministry of Finance Secretary for Finance and Administration Patrick Kabambe said he could not recall that his ministry owes PVHO K13 million but said Treasury will deduct the money from ministries and departments on behalf of PVHO after verifying with the Auditor General's office.
State House Chief of Staff Ken Zikhale Ng’oma, whose institution owes PVHO the highest amount, said all the debts were accumulated by the former government and accused it of “total mismanagement”.
He wondered why they were hiring vehicles from PVHO, saying the new government has been in office for almost a year now but State House has not hired a single vehicle from PVHO.
Ng'oma said State House will not settle the debts, saying it will be up to the Ministry of Finance to decide what to do.
When asked to comment on the debt OPC owes PVHO, Chief Secretary for OPC Bright Msaka referred the matter to one of his officers responsible for finance, a Mr. Fatchi, who refused to comment, saying he is not mandated to speak.
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