Minister of Finance, Economic Planning and Development Goodall Gondwe has disclosed that at least 20 members of Parliament are suspected of mismanaging Constituency Development Fund (CDF) money and risk possible arrest and prosecution.
Responding to The Nation enquiry on why Treasury bowed down to legislators’ demands to increase CDF allocation amid reports of mismanagement of K80 million in 16 of the country’s 28 district councils, Gondwe yesterday quoted an internal audit report which indicates that 20 MPs are suspected to have abused the funds meant for projects at grass roots level.
He said: “There are at least 20 legislators who are suspected to have mismanaged the funds in their respective constituencies. As government, we want to ensure that the suspects are brought to book and prosecuted.”
In Parliament last week, Gondwe shared with the legislators an excerpt of the audit report on CDF and District Development Fund (DDF) done last year which indicated that about K80 million is missing from the K3 billion allocated to 16 district councils under CDF and DDF.
The report also found that some of the MPs were the ones sourcing quotations instead of procurement departments in councils.
Reads the excerpt: “In some cases, the goods and materials were procured from suppliers that were related to the honourable members of Parliament. In addition, many projects were initiated by the honourable members of Parliament only without the involvement of their area development committees.”
During yesterday’s interview, Gondwe said government is currently exploring ways of funding development projects at the grass roots level to replace CDF and DDF.
The minister said, among others, the newly established National Planning Commission will offer a platform where government officials and the members of the commission would brainstorm on the best way forward
However, he could not justify the recent increase in CDF, but said that government plans to review CDF guidelines between now and the next financial plan.
In a separate interview, Minister of Local Government and Rural Development Kondwani Nankhumwa said once furnished with the detailed report, appropriate action will be taken against legislators suspected of abusing development funds.
He said: “What the ministry is doing now is that towards the end of any financial year, Treasury sends auditors to all the councils to do audits of all projects. Right now, an audit for Masaf 4 public works programme is ready and will be tabled [in Parliament] by the Minister of Finance any day, and all people suspected to have embezzled funds are being arrested.”
In his reaction, Ben Kaluwa, an economics professor at the University of Malawi’s Chancellor College, said the increase in CDF should be performance-based. He added that the increase should not be across the board.
He said his students recently conducted a study on the efficiency of CDF and found that it is a mixed bag with some areas having projects of better quality and completed and other areas getting substandard and uncompleted structures.
In the just passed K1.3 trillion 2017/18 National Budget, legislators held to a ransom a K193.8 billion allocation to the National Local Government Finance Committee (NLGFC) as a bargaining chip for Gondwe to increase their CDF.
The MPs demanded a 66 percent increase in CDF from K18 million to K30 million, but Gondwe relented that the CDF would be increased to K23 million.
Malawi Economic Justice Network (Mejn) executive director Dalitso Kubalasa observed that CDF guidelines are not being followed to the letter to the extent that the fund remains highly politicised.
He said it was unfortunate that it is political structures implementing the fund, instead of the ideal local governance and development structures, with the decentralisation architecture of checks and balances. n