A National Audit Office (NAO) audit has revealed that about K444 million at embassies and Ministry of Foreign Affairs and International Cooperation was paid into personal accounts purportedly with intent to defraud the Malawi Government.
While government continues to proclaim that it has put in place measures to check against abuse of public funds in government ministries, departments and agencies (MDAs), the situation on the ground seems not to change if the audit findings are anything to go by.
The results of the audit, covering the 2017/18 financial year, apparently vindicates findings of an internal audit done at the Malawi Embassy in Ethiopia in 2016 which then pegged the fraudulent transactions at K293 million or $406 206.15.
In May 2016, police arrested then Malawi Deputy Ambassador to Ethiopia Doreen Kapanga and First Secretary for Administration and Finance at the mission, Fletcher Chowe, in connection with the said transactions.
The audit report implicates, among others, a former Principal Secretary (PS) in the ministry as the controlling officer at the time, a senior accounts clerk at the ministry’s headquarters and three officers at the Malawi Embassy in Ethiopia.
At the embassy in Ethiopia, the report says the audit team checked documentation such as bank statements, payment vouchers and report issued by internal auditors from the Ministry of Foreign Affairs and International Cooperation where they discovered that the officers at the mission had an intention to defraud the government by acting in collusion on various transactions.
Reads the audit report in part: “Fake remittance advices [which usually reflected smaller figures than the original ones] were e-mailed to the embassy by the senior accounts clerk.
“Then the Deputy Head of Mission, Doreen Kapanga, would download the e-mail and put the fake remittance advices on official file. Apparently, she was well aware of the actual/original funding figures having been informed.”
The auditors concluded that the plan was to hide the actual funding figures from other diplomats who were not involved in the scheme to ensure easy encashment and deposit the difference between the fake remittances and the genuine transactions into the personal accounts of Kapanga and Chowe without any suspicion.
The audit report says the payments were made through cheques disguised as rentals, shipments of goods for recalled diplomats and advances.
But the audit found that the said cheques were not paid to the landlords.
At the ministry headquarters in Lilongwe, the audit identified unverified external travel allowances amounting to K165 million, expenditure on cancelled air tickets amounting to K16.6 million, payment of external travel allowances on a fully-funded trip at K7.6 million, external travel allowances paid for a trip not undertaken by the former PS in the ministry at K301 370.04 and unaccounted for fuel of K29 million.
The final audit has disclosed weaknesses in financial and internal controls both at the ministry headquarters and embassies to an extent that millions were paid for activities that did not exist and incidences of money paid but not for intended purpose.
In his report, acting Auditor General Thomas Makiwa said the ministry failed to abide by the Public Finance Management Act in several ways and recommended the need to strengthen audit committees in all MDAs to facilitate speedy responses to audit reports.