Home NewsLocal News LDF, Finance ministry fight over M30 million debt

LDF, Finance ministry fight over M30 million debt

by Lesotho Times
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Ntsebeng Motsoeli

A WAR of words has erupted between the Lesotho Defence Force (LDF) and the Finance ministry over the former’s claims that is owed M30 million by South African company, Avis Fleet Services, for motor vehicle services that Avis did not provide to the army.

The LDF recently made the M30 million claim at a hearing that was conducted by the Public Accounts Committee (PAC). The LDF claims that Avis illegally charged them the money as standing charges (a flat rate that is paid to the supplier regardless of whether or not the service is used) for services that it did not request. It also says the services were not provided.  However, the Ministry of Finance insists that Avis does owe the army anything.

Avis Fleet Services was, in November 2007, awarded a contract to supply, operate and maintain a fleet of 1 300 vehicles for the government. The five-year contract expired in October 2012.

According to the LDF chief of staff, Brigadier Sechaba Kaibe, Avis took advantage of its contract with the government to bill the LDF standing charges even though the army had its own separate budget which it used to purchase vehicles elsewhere.

Brig Kaibe said the army only procured one Lexus car from Avis which was used by the LDF commander. He said Avis was not supposed to bill any standing charges on the LDF because the army purchased and maintained its own fleet.

He said that Avis only assisted by connecting the army with potential suppliers for their vehicles.

Brig Kaibe said they only became aware that they had been overcharged by Avis in 2012 during a visit by a World Bank specialist who evaluated the government and Avis Fleet Services contract before its expiry.

He said up to now the LDF has not recovered the money even though they had notified the Finance ministry immediately after discovering that they had been overcharged.

“We realised when the fleet supply and services contract between Avis and the government was about to expire that Avis had charged the LDF for services they had not supplied,” Brig Kaibe said.

“We learned that they had charged standing fees even on cars that the LDF had bought from its own budget and was servicing elsewhere. We only had one Lexus car from Avis which was used by the army commander.

“We buy and service our cars elsewhere. Avis did not provide the army with any vehicles nor did they provide any maintenance services except for the one car that was used by the commander. The only time we worked with them was when they linked the army with dealers to purchase vehicles elsewhere.”

However, the LDF’s claims were disputed by Finance ministry officials who told PAC that a forensic audit report by Bosmans auditors revealed that Avis did not owe the army any money.

“Avis has not paid LDF any money. An audit report says that Avis does not owe government any money,” said ‘Mathabo Mphale, the contract manager in the Ministry of Finance.

PAC chairperson Selibe Mochoboroane however, questioned the authenticity of the audit report arguing that the engagement of the auditors was shady as it did not follow the standard procedure for the hiring of independent auditors.

Mr Mochoboroane said this after calling the Auditor General (AG), Lucy Liphafa’s office to inquire about the engagement of Bosmans auditors. The AG reportedly told Mr Mochoboroane that she did not know how the auditors had been engaged.

Mr Mochoboroane called Ms Liphafa after being informed by the Ministry of Finance officials that the AG’s office was responsible for hiring independent auditors whenever they were required to examine the government accounts.

“I have just gotten off the phone with the Auditor General (Ms Liphafa) and she does not know anything about this auditor,” Mr Mochoboroane said, adding that “it was futile to consider any claims made in the Bosmans report”.

Mr Mochoboroane then directed the finance ministry officials to engage the LDF representative to resolve the issue.

In a subsequent interview with the Lesotho Times, Brig Kaibe insisted that Avis owed the LDF M30 million.

“We maintain that Avis owes LDF the M30 million in standing charges. We stand ready to engage with the team from the Ministry of Finance as has been recommended by PAC,” Brig Kaibe said.

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