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NetOne fails to fix abuse of US$1m Covid-19 fund



MOBILE network operator NetOne has failed to properly account for a US$1 million fund the organisation was mandated with distributing to vulnerable citizens whose livelihoods were adversely affected by the Covid-19 lockdown in 2020.


 Some of the anomalies were highlighted by Auditor-General Mildred Chiri in her report titled “Special Audit Report of the Auditor-General on the Covid-19 Pandemic Financial Management and Utilisation of Public Resources in the Country’s Provinces”.

 The report was tabled in Parliament on 3 August last year. NetOne is wholly-owned by the state and was formed as a subsidiary of the Posts and Telecommunications Corporation (PTC) in 1996.

In 2020, the telecommunications company was allocated ZW$89 million (US$1 million at that time) by the government as part of a Covid-19 relief fund meant to cushion citizens worst affected by the lockdown, as identified by the Department of Social Welfare.

The intended beneficiaries were mainly vendors, owners of small to medium enterprises, disabled persons, child-headed families, returning residents coming from neighbouring countries, food insecure households not supported by donors, the elderly and chronically ill persons.

However, an investigation by The NewsHawks with support from Transparency International Zimbabwe’s investigative journalism fund looking into the use of Covid-19 funds found that there were a lot of irregularities in the distribution of the money.

The anomalies have not been rectified, two years later. The investigation showed that NetOne distributed the funds through its mobile money facility, One Money, between 19 May and 12 December 2020.

Identified beneficiaries were supposed to receive the credits via their sim cards. A pertinent case of bungling happened in Buhera district, we can reveal. It was discovered that a total of ZW$201 900 Covid-19 allowances were processed in July 2020 for 673 beneficiaries. Each recipient was meant to receive ZW$300.

However, NetOne made a major blunder by issuing out incorrect contact details such as the addresses of beneficiaries, making it impossible for them to be reached.

As a result, the beneficiaries failed to collect the sim cards from the Buhera district social welfare office, although they were loaded with the money. Officials at Buhera Rural District Council who spoke to The NewsHawks confirmed that up to now some of the intended beneficiaries are yet to get the allowances, which have since been eroded by inflation.

Investigations also revealed that while some people collected NetOne lines with the allocations at social welfare offices in the country’s districts, in some instances these were collected from the company’s offices.

Sources however revealed that there was use of third parties in the collection of some allocations at the NetOne offices, which was a major loophole that resulted in leakages of the funds to the benefit of NetOne employees and their connections.

Officials revealed that 88 Buhera district beneficiaries had their Covid-19 allowances amounting to ZW$26 400 collected by third parties without written authorisation from the intended beneficiaries.

At law this is illegal. It is a violation of section 59 (10) of the Public Finance Management (Treasury Instructions) of 2019 which stipulates that the collection of government funds by third parties must be supported by proper written authorisation which should be attached to the payment voucher.

The use of the third parties is also in violation of section 62 (3) of the Public Finance Management (Treasury Instructions) regulations of 2019 which requires the accounting officer to institute internal controls to verify that the beneficiary details on the source document are the same as those to be paid.

 The NewsHawks also zeroed in on Kwekwe district and found out that NetOne had not recovered money it disbursed to undeserving citizens, mostly civil servants like nurses, teachers and war veterans.

Obert Chinhamo, director of the Anti-Corruption Trust of Southern Africa (ACT-SA) confirmed the findings and said thousands of informal sector workers who were sidelined during the disbursements were bitter.

ACT-SA is headquartered in Kwekwe. Some of those who benefitted unjustifiably were known war veterans and civil servants, including teachers, headmasters and police officers.

The Kwekwe Business Association also recorded names of undeserving beneficiaries who received cash at the expense of vulnerable citizens like vendors and small to medium business enterprise owners who could not sell their wares due to the strict lockdown. They had been shortlisted to benefit from the fund.

“NetOne did not correct the anomalies in the distribution of the funds. The bitterest people are from the informal sector who are aware that underserving people benefited ahead of them. There were promises that this was going to be corrected, but up to now nothing has happened in that regard,” said Chinhamo.

 In an interview with The NewsHawks, Auditor-General Chiri confirmed that NetOne had not presented to her evidence to show that the parastatal had rectified the bungled disbursement of the Covid-19 funds.

When asked what can be done in the circumstances, Chiri said: “The board and management of NetOne must resolve the issue. We cannot prescribe how funds must be disbursed in future, but measures must be put in place so that there are controls which ensure that there are no leakages.”

NetOne spokesperson Roseline Chisveto has been ducking and diving following The NewsHawks’ request for comment.

 She said the company’s public relations office did not receive our emails, yet they were repeatedly sent on 17 August at various times. We sought a comment as to why NetOne had not rectified the bungling of the Covid-19 funds disbursement.

 “No one in the public relations section received any email,” she responded via WhatsApp on 18 August. The emails did not bounce back or give notification of delivery failure. In a telephone call on 19 August, while responding to repeated requests for a response, Chisveto said: “The disbursements were done long back and it is difficult to comment on that matter because even the leadership at NetOne has changed. It is an old matter.”

When The NewsHawks sent her the questions via WhatsApp last Friday since she was insisting the written questions were not reaching her via email, she said: “Checks with business showed that all the anomalies were corrected.”

Asked to demonstrate how NetOne rectified the anomalies and provide proof, Chisveto requested for a physical meeting to explain. However, she became non-committal when asked when the meeting can be held.

 The abuse of funds by NetOne has now courted the ire of Parliament’s Public Accounts Committee (PAC), which is pushing for a forensic audit to flash out officials who benefited from the abuse of the US$1 million Covid-19 relief fund.

 Gweru Urban MP Brian Dube, who chairs the committee, confirmed the development. He said his committee had made recommendations in Parliament which were adopted by the House over the mismanagement of Covid-19 funds by the state’s telecommunications giant.

“Our recommendation on this is that a forensic audit be conducted to get into full details on who really abused the funds because they did not get to the beneficiaries. We want to have full investigations on whether money was looted by NetOne,” said Dube, who is also a lawyer.

“So, where I stand, there is need to get to the bottom of this and make sure that those most responsible for the failure to administer the Covid-19 pandemic resources be made to individually, criminally and civilly account for their actions, commissions, omissions or complacency which resulted in the resources being mismanaged.”

He added that NetOne “did a terrible job, resulting in a lot of fundamental errors”. The findings by The NewsHawks on NetOne are also confirmed in Chiri’s report.

 Chiri audited the disbursements made in six provinces. The six provinces are Manicaland, Masvingo, Midlands, Matabeleland South, Mashonaland West and Mashonaland Central.

“No reconciliations were done with the mobile money service provider to confirm whether all the payments reached the intended beneficiaries as there were instances where the mobile money service provider issued Two (2) different NetOne lines to the same individual,” said Chiri.

Chiri also discovered that NetOne used an unreliable database of beneficiaries. She found out that there was processing of payments to duplicate beneficiary names and beneficiaries who had similar identity card numbers but different gender and dates of birth.

“There was processing of payments to beneficiaries with fictitious identity numbers and suspicious names, incorrect and insufficient contact addresses. There was also use of similar contact addresses for beneficiaries in districts. No follow-up mechanism was developed to verify existence of the beneficiaries and whether the allowances had reached the intended beneficiaries,” wrote Chiri.

She also discovered irregularities in the sim cards that were issued by NetOne for purposes of distributing the allowances to beneficiaries.

“NetOne lines which were not uploaded with the allowances to beneficiaries (were distributed). There were batches of sim cards to incorrect districts or provinces resulting in non-collection of the allowances by intended beneficiaries,” said Chiri.

 NetOne is not the only entity accused of mismanaging Covid-19 funds. Former Health minister Obadiah Moyo was arrested and subsequently sacked on allegations of corruption regarding a US$60m deal to procure Covid-19 test kits and medical equipment.

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