Scramble for Covid-19 funds unearthed

…no one has been questioned yet

Staff Reporter

Maseru – A ministry of finance internal audit report released this week has exposed a detailed saga of a free-for-all scramble for Covid-19 emergency relief funds between 2020 and last year. The trail of unjustifiable expenses details unbridled greed by Basotho officials and outright poor governance of Covid-19 funds amounting to over M600 million spent under the watch of the National Emergency Command Centre, NACOSEC’s fore-runner.

The Lesotho government declared a State of Emergency on COVID-19 on March 18, 2020 in line with the World Health Organisation (WHO) declaration of the COVID-19 as a pandemic on March 11, 2020. This opened the floodgates of a scramble to benefit from the funds quickly made available. A cursory look at the report shows that large sums of money were spent more on side issues such as catering and accommodation than on the main business of containing the deadly pandemic such as securing PPEs or caring for suspected carries at quarantine and medical centres.

“Major budgetary activities were PPEs, quarantine facilities, recruitment of health workers and medicals and equipment,” the audit states yet large sums were spent on subsidiary activities. The net result, according to the audit, among others, shows a “high possibility for payment of non-rendered services, invalid or falsified lists” and the “possibility of duplicated payments due to duplicated lists”. Glaring irregularities show that officials concerned took advantage of the state of emergency to overstate costs and inflate prices since everyone was panicking and very little was known about the pandemic when it hit Lesotho’s shores two years ago.

A scramble for a piece of the Covid-19 ensued among tenderpreneurs which saw companies being awarded fat tenders only a few months or weeks after their formation. Shockingly, unnecessary extra layers of service providers were added to the supply chain at every opportunity. For instance, the audit notes there was a prevalence of “purchases from middleman instead of relevant suppliers” and there was no attempt to research and compare prices by procurement unit (s) and there was no updated and approved suppliers’ database.

The audit directly faults the government of Lesotho for opening the floodgates for a free-for-all scramble to loot – or may be deliberate because of lack of policy guidance. The audit recommends that “during times of crisis or state of emergency, GoL must be encouraged to avoid purchases from the intermediary instead opt to procure directly from the main and relevant supplier(s).” The following details one of the examples that raise eyebrows.

On the 31 March 2020, the Disaster Management Authority (DMA) opened a specialised account “COVID-19 Account no. 62848753415” with First National Bank) FNB. There were six tranches released by the Ministry of Finance to this account on different dates as follows: On April 2, 2020, M40 million was released; on July 28, 2020, M100 million was released; on November 3, 2020, M95 million was released; on December 4, 2020, M90 million was released, then on December 22, 2020 another M78 514 064 was released before the final tranche of M100 million was released into the fund.

Altogether a total amount of M503 514 064 was released into the account in that financial year. The closing balance as at 30 March 2021 was M31,580,127.55 indicating that the total expenditure including bank charges as at 30 March 2021 amounted to M471 933 936.45. Even though the work was performed jointly, the Ministry of Health was working on payments that were initiated by the ministry for health related activities while DMA on the other hand, processed those payments that were initiated under Prime Minister’s Office.

As a result, the over M400 million was spent haphazardly since procurement of Covid-19 activities were performed separately according to the interviews conducted with procurement officers of the two entities, Internal Auditors (IAs) learned that procurement of Covid-19 activities was performed separately.

Taking advantage of the state of emergency, due diligence was thrown out. “There was lack of proof of services rendered for some invoices on catering, transport and quarantine facilities whereby in some instances; there were no signed lists provided for people catered for, commuters delivered to different places and people isolated in quarantine facilities, and there is also inconsistency/incomplete on available lists in that; lists provided do not correspond with number of people on the claims, one person wrote and signed for the whole lists, some lists submitted without signatures,” the audit states.

Instances of double invoicing also abound in the audit report. For instance, invoice no: 28764 for Caledonspoort Park home amounted to M755, 766.00 which includes contingency of M36, 350.00 but the same amount of M36, 350.00 is claimed on a separate invoice no: 29884. At the peak of the pandemic in 2020, NECC, chaired by former communications minister Thesele Maseribane, was accused of misusing Covid-19 emergency funds.

For instance, media reports in 2020 sounded the alarm when NECC spent more than M10 million on food for its staffers from different ministries at a time health staff were going with no personal protective equipment (PPE) and there was almost no visible campaign effort to educate Basotho on the ravages of the virus.

Asked by the media to comment on the extravagant spending on food (M10 million), while Basotho were struggling to get PPE, DMA’s acting chief executive officer at the time, one ’Mabatlokoa Molai quipped “people who were dedicated there (at the NECC) from March could not do their work on empty stomachs”. A month after taking over from Dr Thomas Thabane, Prime Minister Majoro disbanded NECC in June 2020 and restructured it and renamed it the National Covid-19 Secretariat (NACOSEC), in terms of the Disaster Management Act (DMA), reporting directly to him.

When Covid-19 broke out, large volumes of PPE were donated but disappeared without trace amidst allegations some medical equipment suppliers were later found in possession of the missing equipment. To date, the suspects are yet to face the law. The audit findings echo the case of South Africa’s Covid-19 procurement scandal, where dubious entities connected to politicians were corruptly awarded projects worth millions at the expense of experienced companies with proven track-records.

Dubbed COVIDGATE by the South African media the scandal saw the health at the time being fired and also sucked in President Cyril Ramaphosa’s spokesperson Khusela Diko and ruling ANC secretary-general Ace Magashule whose two sons were awarded lucrative Covid projects. The audit in question was part of a commitment by the Government of Lesotho with regards to financial assistance from International Monetary Fund (IMF) to address the balance of payment financing gap arising from the economic impact and mitigation efforts to Covid-19 pandemic.

The approval of IMF support required some commitment on the side of the Lesotho government in order to restore macroeconomic sustainability. These include among others: Macroeconomic stability, enhanced governance and transparency in the use of public funds, supporting the health sector to contain the pandemic and supporting livelihoods of the population and economy.