Sports associations that do not conform to set standards on financial management, especially on accountability and submission of financial reports, will no longer be entitled to direct funding from government, Malawi National Council of Sports (MNCS) has said.
The development follows a recent directive by Minister of Sports and Culture Grace Chiumia to Sports Council that it should account for all the funding that it gives to associations.
It also comes after a statement released by Treasury Secretary Ronald Mangani a few months ago on enforcement of financial reporting requirements of the Public Finance Management Act (PFMA).
In the statement Mangani said in line with the section 84 (3) of the PFMA of 2003, funding to ministries, departments and agencies (MDAs) would effective January 2016 only be made upon the Ministry of Finance, Economic Planning and Development receiving monthly returns, revenue returns, monthly commitments, monthly bank reconciliations and monthly payroll reports.
Speaking in an interview with the Weekend Nation on Tuesday, Sports Council executive secretary George Jana said with effect from the next financial year, the council will take over the responsibility of managing the associations’ expenditures such as buying air tickets for national teams and paying athletes’ allowances.
He said the action has been taken because some associations were failing to account for their annual subventions from government.
“Some associations have been perennial failures in management and submission of financial reports. Therefore, we believe the latest arrangement will help both the council and associations to be accountable to the government.
“What will be happening is that associations will submit their calendar and we will be paying for expenditure as to what projects and who needs to be paid. In that way we will be able to track expenditure,” said Jana.
However, he could not be drawn to name the associations that are defaulting financial accounts.
But the development comes barely a week after Sports Council warned Netball Association of Malawi (NAM)—which is one of the major beneficiaries of government subvention—of losing part of its funding for its failure to submit audited accounts for the past three years.
MNSC stand come just after government announced that it has allocated the council K1 billion in the 2016-17 budget that Finance Goodall Gondwe presented to Parliament yesterday.
But Jana said they are yet to come up with a framework on how they will allocate the K1 billion with about half of it going towards the completion of the Bingu National Stadium.
“We are looking into a lot of things. We are yet to come up with specific allocations,” said Jana.
Last financial year, MNSC was allocated K1.2 billion.
In an interview earlier this week, Chiumia said that as a ministry they had observed that most sports codes do not submit activity reports in how expenditures were carried out.
“With such kind of management it is hard to build trust let alone win the confidence of the corporate world,” she said.
To curb the problem, Chiumia said she has arranged meetings with heads of the 43 associations affiliated to Sports Council.
“There are a lot of challenges in the way some of our associations are operating and as such, there is need to meet their heads to brainstorm on how we can address the problem,” said Chiumia. NAM and FAM were the biggest beneficiaries having been allocated K101 million and K100 million respectively.
While commending MNSC move, FAM said they are not among associations who have defaulted in submitting their financial reports.
“We are very professional and at no time had we failed to engage auditors and submit our expenditure activities in the annual financial report. We are not a briefcase institution. We have a full-time accountant and every department is accountable,” said FAM general secretary Suzgo Nyirenda.
NAM president Rosy Chinunda said the arrangement with MNSC currently is that the Council pays directly to service providers.
“The money we handle from Council is upkeep or allowances for the girls (players). Council issues us a cheque and we pay the players but for services provided to NAM like food and accommodation during camp, council pays directly to firms providing the services.
“They give us printouts and we reconcile. That has been the arrangement,” she said. n