ZIPS MEETS THE SECRETARY TO THE TREASURY

ZIPS has continued with the crusade of engaging government on various issues that affect the Supply Chain profession in Zambia.

The ZIPS President Mr. Chibwe D. MWELWA led the ZIPS Council comprising of the Vice President South, Mr. Noel Sandukiya, Council Secretary Mr. Daniel Kabamba, Council Member Mr. Patrick Tembo, the Registrar Mr. Henry Chanda, in paying a courtesy call on the Secretary to the Treasury, Mr. Fredson Yamba on Friday 14th February 2020. The meeting addressed the following issues:

1. LACK OF LEGITIMATE POWER FOR THE PROCUREMENT FUNCTION

ZIPS informed the Secretary to the Treasury that the management of Government funds was by a Trio logy of departments - Internal Audit, Finance, and Procurement.

The three sectoral aspects of Government spending regime is critical to the prudent management of the public funds. The Procurement function commits Government funds and this department is the mainstay and flagship to the value addition process of acquisition of government procurement services.

Mr. Mwelwa reminded the Secretary to Treasury that Government had elevated the positions of Accountant General and Internal Auditor to the Permanent Secretary level while the third member of the trilogy, Procurement was left out.

He also reminded the Secretary to the Treasury that the entire Government procurement system had no ANCHOR in government which made procurement to be easily manipulated and that made the value addition process to be elusive. He advised the Government to quickly address this status quo because if this was not addressed the challenges that Zambia was facing relating to procurement would continue. Mr. Mwelwa further stated that the issue of legitimate power for procurement officers needed to be addressed urgently.  It was noted that Government now has Director of Finance and Director of Internal Auditor yet still procurement remained at Assistant level position.

Mr. Mwelwa stated that ZIPS was advocating for the funding of the Procurement General which was already part of Government structure under PSMD.  

ZIPS was concerned that the funding of this position was long overdue. Its absence had rendered the procurement function incapable of taking full responsibility and accountability in Public Procurement. The benefits to be realised from the creation of this position are highlighted as follows:

- As the anchor for Government procurement, the position at PS level will, therefore, be at the appropriate level to deal with all challenges in Government procurement, including the procurement related queries that consistently appear in the Auditor General’s Report that relate to the procurement function.

2. ALIGNMENT OF STORES FUNCTION TO ACCOUNTS DEPARTMENT

ZIPS President informed Mr. Yamba that the circular No 8 of 2019 (Alignment of Public Stores Management of the Public Finance Management Act No 1 of 2008) which was issued by his office created a lot of challenges because Stores Management is part of the Procurement function and NOT the function of Accounts.  He further stated that the reason why the profession was called procurement and supplies is because the supplies part actually refers to the stores function.

The Institute submitted that the circular issued had caused a lot of challenges in the profession because stores officers were instructed to report to Accounts departments instead of the Purchasing and Supplies Units (PSUs) and that if these changes in Stores reporting structure were not quickly addressed and managed, it would have the opposite effect than that intended.

Mr. Mwelwa stated that ZIPS had reviewed the Public Finance Management Act No 1 of 2018 and it was clear that the section being quoted in the said Circular did not indicate that Stores should be reporting to the Finance Department.

The Council Secretary, Mr. Kabamba added to the matter and stated that Supply Chain constituted of Stores, Inventory, and Procurement and these were inseparable. He further stated that the Public Finance Act makes reference to the value of inventory which goes in the ledger and Finance and Stores meet at the point of ledger because finance looks at the value while stores focus on the physical items.

The ZIPS President, Mr.C.D. Mwelwa noted that some of the challenges facing the Stores department were because a lot of Stores officers in government were not qualified and also categorically advised the Government to withdraw this communication because it was causing massive challenges.

3.0 RESPONSE FROM THE SECRETARY TO THE TREASURY

In responding to the issue raised by ZIPS regarding the funding of the Procurement General, Mr. Yamba noted that it was unfortunate that the position of Procurement Controller/General was not funded. He stated that he was going to engage PSMD so as to understand why this position was not funded. He further mentioned that the position was key and that funding it would streamline Supply Chain Management in government and in the nation at large.

Mr. Yamba observed that nobody was paying attention to what was happening in the procurement function when a lot of government funds were committed by the officers in this profession. He also challenged ZIPS to be more visible and continue pushing its agenda.

Mr. Yamba stated that he was on leave at the time ZIPS wrote to him regarding the alignment of the functions but assured the Institute that he was going to investigate whether the circular was in tandem with the Public Finance Act, thereafter he would constitute a team which would include the Accountant General, ZIPS and other interested stakeholders so as to see how best they could resolve this matter.

Mr. Yamba further indicated that if need be, the circular would be withdrawn after a conclusive consultative process.

Issued by

ZIPS Secretariat

19th February 2020