Times Of Swaziland: CO-OP PRESIDENT’S E30 000 PHONE RAISES CONCERNS

CO-OP PRESIDENT’S E30 000 PHONE RAISES CONCERNS
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Nolwazi Bongwe on 11/02/2025 08:19:00


MBABANE – The president of the Eswatini Multipurpose Corporative Union Limited
(ESWAMCU) is alleged to have purchased a contract phone for E30 000. This
purchase, 10 times the cost of phones acquired by other Board members, has come
to light in a recent audit and raises questions about financial management in
the organisation.The agreed-upon procedures report, conducted by SNG Grant
Thornton Eswatini for the Ministry of Commerce, Industry and Trade, paints a
disturbing picture of mismanagement, flouted procedures and potential conflicts
of interest, casting serious doubt on the union’s future.
The audit uncovered significant deviations from established procurement
practices. A staggering 89 per cent of transactions lacked the required minimum
of three quotations from suppliers. ESWAMCU is an apex body representing all
farming and multi-purpose co-operatives in Eswatini to improve their access to
inputs, equipment, markets and technical information. The organisation was
officially formed and registered on September 8, 2006. Currently, the subsidy
run by ESWAMCU is benefitting the Board members, staff and 13 primary societies.
Unapproved
According to the report, purchase orders were frequently unapproved, goods
received often could not be verified against invoices and payments totalling
E158 131 65 were documented on bank statements without any supporting evidence.
Procurement outside the approved budget was commonplace, including payments made
to the president’s personal account and questionable expenditures on items
like alcoholic drinks during a policy review session. These allegations are
contained in a report whose veracity is still to be tested. Many resolutions
passed by the general membership (GM) were reportedly simply ignored.
These included the development of an election policy, debt recovery efforts, and
the implementation of a subsidy policy. One particularly egregious case involved
a house rented under a different name but occupied without any rent payment,
directly contravening a GM resolution.While ESWAMCU’s core mandate is to
supply farm inputs, the audit revealed that the Union allegedly used NMC
proceeds instead of an IDCE loan for subsidy inputs without member consultation
or budget approval. Concerns were also raised about the selection of suppliers,
with evidence suggesting that procurement policies were routinely disregarded
and that some suppliers lacked approval from the Procurement Committee.
A complex transaction involving multiple companies further obscured matters.
Debt management proved to be a major weakness. Board members and staff owed
substantial sums for farm inputs, with no clear repayment agreements in place.
Rental payments were also problematic, with expired lease agreements, unpaid
rent and properties being billed despite being vacant. Alarmingly, ESWAMCU
lacked a credit control procedure or a debt recovery plan. The status of certain
loans added to the financial uncertainty. Confusion surrounded a FINCORP loan,
with ESWAMCU claiming government takeover without any supporting documentation. 
A E500 000 loan from the CCF for a failed maize and bean project also raised
concerns, as there was no clear accounting of how the funds were used.
Criticised
Governance practices were also heavily criticised. While Board resolutions were
generally passed by majority rule, many were not implemented.  Executive members
frequently made decisions without Board involvement and key decisions were made
by the president and vice president without proper approval. The report detailed
instances of potential mismanagement of funds, including improper payments for
travel claims, consultation services and a breakfast meeting with Members of
Parliament (MPs).  Fuel vouchers were allegedly misused, and the president
purportedly acted as both preparer and approver, eliminating any segregation of
duties. Beyond the questionable phone purchase, other instances of improper
board conduct were revealed.
These included the payment of special allowances (deemed improper under the
Act), Board members engaging in day-to-day operational matters and other
financial irregularities.
The auditors expressed significant doubt about ESWAMCU’s ability to continue
as a going concern, citing long outstanding loans, dependence on external
funding, a lack of reserves, weak credit control, ambiguous policies and a weak
control environment.  The report implicitly calls for immediate action to
address these issues, emphasising the need for stronger internal controls,
adherence to procedures, improved financial management and greater transparency.