In a move that is likely to draw public criticism, the court slapped Mwangala with a seemingly modest fine of Sh1 million fine.
The Youth Fund boss was charged in 2015 with commissioning a contract of over Sh208 million without the board's approval.
In his ruling, senior principal magistrate Felix Kombo stated that the prosecution proved the graft charge against Mwangala beyond reasonable doubt.
The magistrate handed him a fine of Sh1 million fine with the alternative of serving twelve months in jail.
"Having considered all material evidence, l find the accused guilty and convict him of abuse of office charge."
"I order him to pay a fine of Sh1 million or in default to serve 12 months imprisonment," the magistrate stated.
Former Youth Fund Chairman Gor Semelang'o was among those who testified against Mwangala.