CO-OP PRESIDENT’S E30 000 PHONE RAISES CONCERNS

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.

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