Mulandira malipiro anu mochedwerako, atero akuluakulu a ADMARC - Malawi 24

Audit at ADMARC reveals fraudulent payments for dead people

Post was last updated: September 27, 2022

An audit at Agriculture Development and Marketing Corporation (Admarc) has revealed that the company lost over K300 million through among others unrecovered staff loans and fraudulent payments for motor vehicle insurance and medical cover which included dead employees as beneficiaries.

Graham Carr conducted an audit focusing on motor vehicle insurance scheme, Medical Aid Scheme (Masm), staff loans and recoveries and dunnage poles fraud for June 1 2020 and March 31 2022.

A draft report which Malawi24 has seen indicates that Admarc paid K39.4 million in insurance for 136 vehicles belonging to staff members, which is yet to be recovered.

ADMARC paid insurance for non-runner vehicles amounting to MK18,880,767.00, insured vehicles for non ADMARC staff amounting to MK828,915.00 and also paid insurance premiums for Ocean Car Hire hired vehicles amounting to MK453,959.00 even though the car hire order form covers insurance.

On medical aid, the report says ADMARC  paid MK534m for the period against what ADMARC indicated as expected payments on their payroll of MK417m. According to the report, this shows that there was lack of proper reconciliation between the amounts on the MASM manifest to what ADMARC payroll staff had posted in the system.

ADMARC also paid an amount of MK15,854,000 to MASM for the 21 months period on behalf of beneficiaries who have been identified as undeserved, MK1,572,000 for deceased persons and MK6,728,000 for people no longer employed by ADMARC.

On loans, the audit report says: “Total loans that were noted to have not been recovered at all, and at times consistently not recovered amounted to MK43,468,630.26 from the 2021 staff debtors listing and MK10,816,417.77 from the 2022 staff debtors listing.

“Total loans noted to have remaining recovery periods of over 24-months and at times unreasonably over 24-months from the balance sheet dates amounted to MK157,611,648 from the 2021 balances and MK126,271,812.”

In addition, the report has revealed that MK37,165,345,00 was embezzled during the procurement of dunnage poles at the company.

The auditors have since advised ADMARC to recover the amounts lost through vehicle insurance, medical cover payments, embezzlement and staff loans and to discipline staff  who led to the loss of funds.

Earlier this month, government suspended all ADMARC operations pending a restructuring process which will see 3,122 employee losing jobs.

According to a letter dated September 15 2022 by Admarc board chairperson at the time, Alexander Kusamba Dzonzi, a decision has been made to lay off employees due to the poor performance of the company.

“Over the years, Admarc has been poorly performing such that it has accumulated debts that are now choking its operations. The company now has more liabilities than assets.

“The company has a huge wage bill that is not supported by the company’s revenue base and business model such that it has been the shareholder paying for the employees’ salaries and other statutory obligations for years.

“Admarc intends to retrench all employees since the company has been completely restructured. The retrenchment exercise will be carried out in a phased manner and all guidelines for the retrenchment process will be followed,” Dzonzi, whose tenure has since expired, said in the letter to the company’s workers union.

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