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The latest report of the Auditor General on the Constituency Development Funds (CDF) has highlighted the need for enhanced focus on improving the absorption and effective utilisation of funds in areas like community projects and education bursaries.
In the report, Acting Auditor General Dr. Ron Mwambwa noted that there was also ineffective monitoring which had led to funds remaining unspent at the end of the financial year.
He stated thst the impact of this, was that there was a lost opportunity for development and service delivery that local communities urgently require.
The report highlighted cross cutting audit observations which had revealed strides made in the implementation of the CDF and some areas that still need improvement.
In particular, the report highlights the improved absorption rates on the implementation of the Youth and Women Empowerment Grants and Youth and Women Empowerment Soft Loans components.
It, however, noted that the absorption rates on the implementation of community projects and secondary school especially Boarding Schools and Skills Development Bursaries were average.
While the report identifies the positive strides made in the implementation of the CDF across all the 156 constituencies, there were still some challenges such as weak monitoring of community projects.
“This led to poor contract management, delayed completion of some community projects ineffective loan recovery and delayed delivery of desks among others,” Mwambwa said..
He stated that the weaknesses if not addressed would undermine the Fund’s objective of delivering essential social and economic services to the Zambian population.
On Youth and Women Empowerment Grants, there was a high absorption rate on this component in that a total amount of K320,754,460 was spent from the allocation of K333,448,110 representing 96percent utilisation rate against the allocated amount.
“Despite the high absorption rate, there were various instances where recipients of empowerment grants had, without authorisation, diverted the funds towards other activities which is a reflection of weak governance and poor enforcement of compliance measures,” Mwambwa said.
On Youth and Women Empowerment Soft Loans, there was a high absorption rate on this component in that a total amount of K480,463,303 was spent from the allocation of K539,259,360 representing 89 percent utilisation rate against the allocated amount.
However, the report highlighted ineffective loan recovery processes and weak enforcement of penalty provisions which have resulted in significant outstanding balances, indicating poor credit control.
On Community Projects, there was a low absorption rate on this component in that K1,010,228,030 was spent from the allocation of K2,408,781,762 representing a 42 percent utilisation rate against the allocated amount.
Mwambwa stated that this was as a result of weak monitoring and accountability mechanisms which had resulted in the implementation of projects being delayed.
“This is culminating into project backlogs as a substantial number of projects which should have been implemented in 2022 had to be brought forward to 2023 and some of the projects in 2023 have had to be carried forward for implementation in 2024,” he noted.
The report further highlights aspects of poor contract management, lack of due diligence, and weak enforcement of penalties that has led to projects being abandoned after contractors had been paid advance payments.
On Secondary School and Skills Development Bursaries, there was a low absorption rate on this component in that a total of K491,594,218 was spent from the allocation of K881,501,869 representing 56 percent utilisation rate against the allocated amount.
Mwambwa highlighted instances where learners were not reporting to the learning institutions after the Local Authorities had paid for their bursaries which could be an indication of inadequate pre-disbursement verification and post-disbursement monitoring.
“Further, there were also, instances where the local authorities were paying bursaries for non-skills courses in contradiction with the CDF guidelines which ultimately undermines the purpose of the bursary program under the CDF,” he said.
On the Administrative Costs, there was a high absorption rate on this component in that a total amount of K215,589,577 was spent from the allocation of K219,610,294 representing 98 percent utilisation rate against the allocated amount.
Mwambea said the disparities in underperforming areas like community projects and education bursaries highlighted the need for improved and more effective utilisation of the funds.
In addition, Dr Mwambwa recommended that the implementors and recipients of the fund maintain proper documentation and are provided with training on financial compliance.
He further recommended that the local authorities should establish dedicated loan recovery functions, enforce penalties for defaults, and implement creditworthiness assessments and strengthen verification processes.
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