M9m lost in Home Affairs deal

Ministry delegates duties to Chinese-owned private company

KANANELO BOLOETSE

MASERU – The Ministry of Home Affairs in November 2018 appointed a private company, Atlalantic Hi Tech (PTY) LTD, to perform crucial ministerial functions such as management of issuance of residence permits. Atlantic Hi Tech is 100 percent owned by a Chinese entrepreneur, Xiaojun Yang, Public Eye has established.

The government has lost over M9 million in revenues due to this arrangement of enlisting the help of a private company to perform the ministry’s functions, an audit by the acting auditor general, Monica Besetsa, has found.

The ministry of home affairs is the custodian, protector and verifier of the identity and status of citizens and other persons resident in Lesotho. It controls, regulates and facilitates immigration and the movement of persons through ports of entry.

The ministry makes a significant contribution to combating human trafficking and ensuring national security, among others. Besetsa said her office was not provided with any document giving the ministry authority to outsource its functions.

“Issuance of residence permits was outsourced to Atlantic hi Tech (Pty) Ltd for a five-year contract from 9th November 2018,” Besetsa noted in her report on the consolidated financial statements of the government for the year ended 31 March 2020. The report was tabled by minister of finance, Thabo Sophonea, in parliament yesterday.

It indicated that the contractual services to be provided by the company included the establishment of a data enrolment centre, computer networking, residence permit registration and registration and tracking of global and in-country enrolment programmes.

The company would also collect biometric and demographic information for development of secure database on registration of non-citizen residents in Lesotho and monitor such non-citizen residents. It would also manage issuance of residence permits.

“According to the contract, Atlantic Hi Tech was supposed to provide the services at no charge to the ministry of home affairs, but to recover its costs through application fees,” Besetsa said. She disclosed that the application fee was M2 800 per residence permit application and indicated that the permit fees were supposed to be paid to the ministry of home affairs.

“The application fee of M2 800 was contrary to the legalized fee of M1 500 stipulated in the Aliens Control (Amendment of Schedule) Regulations of 2017,” Besetsa said. This means applicants were overcharged by M1 300 – almost 87 percent of the legitimate application fee.

“Since November 2018 to July 2020, the company has processed 3 334 applications and, therefore, collected the amount of M9 335 200. If the function was not outsourced, the ministry would have collected revenue totaling M5 001 000 for those applications processed,” the acting auditor general said.

She added: “The government has lost M9 335 200 on revenues due to this arrangement of outsourcing the functions and also taking into consideration that there were officers within the ministry who were getting salaries but not performing functions of processing application fees.”.

She said management was advised to reconsider the contract agreement as “it does not comply with regulations and also to avoid unnecessary loss of revenue”. Atlalantic Hi Tech (PTY) LTD, was not the only company engaged by home affairs to perform crucial ministry’s functions.

“The Ministry also outsourced visa services to Computer Frontiers Inc. registered in the United States of America. The duration of the contract was 10 years effective from 1 February 2017,” Besetsa said.

According to the terms of the contract, she added, the company would take a service charge of US$50 (about M750 for each visa application and remit to the Ministry of Home Affairs the collection of application fees of $140 for ordinary visas and $200 for emergency visas, every 10 days.

The arrangement, according to the acting auditor general, was that the collected money would be deposited into the ministry’s account held with the Central Bank of Lesotho.

“That was not done at all. This company failed to remit the total amount of M3 053 000 comprising of M306 000 for 2017/18 and M2 747 000 for 2018/19 collected from application fee for ordinary and emergency visas,” Besetsa said.

She added: “The Ministry also failed to submit returns of arrears of revenue to the Principal Secretary (PS) for finance with a copy to Accountant General and Auditor General, contrary to the requirements of section 51 of the Treasury Regulations of 2014 which require accounting officers to render within one month of the end of the financial year, a return showing all amounts which remained uncollected at the end of the previous financial year, excluding bills raised in March.”