While Cashgate should have been a major lesson to thwart the plunder of public resources, government continued to lose billions of kwacha in taxpayers’ money almost every year for the past 10 years.
And more public funds are at stake due to weak controlling mechanisms at Capital Hill, Nation on Sunday has established.
Our analysis of the Auditor General’s reports (spanning from 2009 to 2019), Public Accounts Committee (PAC) summaries and experts’ reports—show that ministries, departments and agencies (MDAs) are not adhering to set guidelines in public finance management, leading to incessant leakages.
The leakages, from our analysis, occur in the same fashion, year in, year out as the Auditor General has been issuing recommendations for improvements, which have been ignored by some controlling officers.
National Audit Office (NAO) spokesperson Carol Bulilani, who is also chief auditor, said the recurrence of issues in their reports is as a result of poor internal structures and lack of control measures in MDAs.
She said: “We believe that these queries recur due to poor internal controls within MDAs, lack of supervision, and a poor performance appraisal system.”
Oxfam and Integrity Platform—two organisations which have been analysing Auditor General’s reports—fear that continued inertia by Capital Hill will perpetuate fraud and render the Auditor General’s office irrelevant.
“There is, therefore, a strong risk that the Malawi Government audit function may not achieve its intended mandate of safeguarding government’s resources,” reads their joint analysis on the 2018 report.
Our inquiry comes in the face of a fresh report from the Auditor General on the accounts of the Government of Malawi for the year ended June 30 2019, which reveals that K35 billion in public funds was stolen.
The K35 billion lost was, according to the revised 2019/20 National Budget, enough to fund the entire Ministry of Gender, Children, Disability and Social Welfare for one fiscal year.
This was also enough money to run the struggling Malawi Prison Services (MPS) for three financial years as its revised budget for the 2019/2020 financial year is K10 billion.
The latest report contains similar irregularities which the Auditor General has been complaining about since 2009—misallocation of public funds, payment without supporting documents, payments without evidence of goods and services delivered, fuel mismanagement, revenue spent at source and documents not submitted for audit, among others.
While these issues keep recurring, the Auditor General has also continued to issue recommendations to MDAs to follow the law in public finance management.
Meanwhile, Treasury says it is unfortunate that some MDAs are flouting laid-out guidelines and procedures.
Ministry of Finance spokesperson Davis Sado said they are working with PAC to check the leakages.
“As a way of addressing the issues, among other measures, government has introduced inspectorate of finance units in MDAs who inspect all documents on compliance matters before payments are processed,” he said.
There was minimal plunder across MDAs between 2009 and 2011 and the auditor’s reports were unqualified, but the figures hovered around thousands.
But from 2012 to 2015, the reports were qualified and a huge chunk of money was misappropriated across sectors.
In the report ending million to K2 billion.
In 2018, about K3 billion is feared to have been lost due to recurrent irregularities just like in 2019 when queries show that a whopping K35 billion cannot be accounted for.
PAC summaries on the Auditor General’s reports from 2013–2017 equally raise concerns that there seem to be deliberate poor record keeping in MDAs for purposes of concealing evidence.
PAC notes that some controlling officers deliberately failed to submit documents for audits for reasons well-known to themselves.
“It was disturbing for the committee to learn that all MDAs that had documents…missing at the time of audit, mysteriously found all documents after the auditors had left. The committee came to a disturbing conclusion that may be these documents are forged and cooked [up],” reads the PAC report adopted in 2018.
The report further recommends: “The committee believes that it is high time that all the culprits were held accountable for their slackness and negligence…the committee, therefore, calls upon all the other law enforcement agencies to vigilantly play their respective roles in ensuring that every malpractice is unearthed and that those responsible are accordingly prosecuted for their wrongful deeds.”
In the latest report, Oxfam and Integrity Platform recommend capacity assessment for leadership and review of financial management systems to tighten the loopholes. The report also expresses worry that the recurrence of issues in all Auditor General’s reports is an indication that the current control mechanisms are weak and cannot be trusted.
Their analytical report also faults lack of action against wrongdoers, saying this could be perpetrating more fraud. Oxfam and Integrity Platform are calling for forensic investigation in all matters where fraud is suspected.
Asked if lack of action was NAO’s concern too, Bulilani said this was beyond their role which stops at issuing reports. She, however, said they expected other agencies to do their part.
“The job of the Auditor General stops at issuing the Auditor General’s report to Parliament. Thereafter, it’s up to Parliament through the Public Accounts Committee to deal with officers who have mismanaged funds. The other part is for the law enforcing bodies,” she said.
PAC chairperson Ken Kandodo had not responded to our questionnaire, but in a written response Sado said Treasury is aware of the challenges and is working to improve the system to control leakages.
On errant controlling officers, Sado claimed that government has always undertaken administrative actions against officers who have failed to perform according to set rules and procedures.
“Government remains strongly committed to ensuring that it safeguards public money and that resources put in the budget are used for their intended purpose,” he added.
The Chief Secretary to Government and the Secretary to Treasury have, more than once since 2014, appeared before PAC where they have made similar commitments but without change.