Forensic auditors hand in more Cashgate files

Director of Public Prosecutions (DPP) Bruno Kalemba has said he expects more arrests after British forensic auditors, Baker Tilly, handed over last week 11 additional case files to the Anti-Corruption Bureau (ACB) and the police.

Kalemba said on Wednesday the development pointed to the likelihood of more investigations, more arrests and more trials.

The total number of Cashgate cases now in the hands of the law enforcers is 39.

“I see more investigations, more arrests and more cases as a consequence of these additional files,” Kalemba said. “The fact that more files have been handed over to the ACB and police suggests that there are issues that must be pursued further.”

Corporate communications officer for National Audit Office (NAO) Thomas Chafunya said in a separate interview: “That’s correct. A total of 11 case files, handed over to us by Baker Tilly, were, per procedure, given to the ACB and the police by the Auditor General. This means the matters are now in their hands for actions they will find appropriate.”

According to Chafunya, more files will be handed over to the local corruption busting body and the law enforcement arm of government in the next couple of days.

“So far we have handed over a total of 39 files,” he disclosed.

Chafunya said the first lot of 10 files were handed over in February, 10 more in March, an additional 8 in April and 11 other files last week.

“More files are being finalised, and their presentation to the relevant authorities will take place soon,” he said.

Baker Tilly, doing the forensic audit as part of the technical support from the British government – the largest single bilateral development partner of Malawi—said in February 2014 that it would continue to examine the information discovered during their initial audit exercise.

The forensic auditors, who describe themselves as an independent firm of chartered accountants and business advisers, have been in the country since November last year following the discovery of massive looting of government funds by sabotaging the Integrated Finance Management Information System (Ifmis).

They embarked on a preliminary forensic audit exercise in December 2013 with a January 31 deadline which they failed to meet, citing legal obstacles.

In their report issued in February 2014, Baker Tilly, said fraud and theft cost the Malawi Government about K13 billion in public funds.

This included K3.7 billion (US$9 002 433.1) siphoned from the Ministry of Tourism, Wildlife and Culture alone between April and September 2013.

The report put the theft into categories of Cashgate amounting to around K6 billion (US$14 598 540), about K4 billion (US$9 732 360.1) in payments without supporting documents and inflated procurement prices pegged at K3.6 billion (US$8 759 124.1).

Of the K6 billion cash siphoned through Cashgate, K3.7 billion was stolen through the Ministry of Tourism, Wildlife and Culture and was linked to the purchase of six buses; K2.1 billion was from the Office of the President and Cabinet (OPC); K151 million from the Ministry of Local Government; and K81 million (US$197 080.3) froma government department that is not known.

An examination of the companies involved found that some were established mid last year apparently with the sole purpose of siphoning money from government coffers.

However, the report also recommended that more investigations were needed and must be extended to international bank transfers.

It also created controversy for not including the names of the companies and individuals involved in the theft and the auditors argued they did this to avoid prejudicing legal proceedings currently in court.

The ACB, police and the DPP were, however, given full identities to compare with their own findings.

Auditor General Stephenson Kamphasa is quoted in the March 27, 2014 edition of The Nation as pleading for patience from Malawians demanding to know particulars of the suspected culprits, saying doing so would need a grace period of three to four months.

Three weeks ago, Minister of Finance, Economic Planning and Development, Goodall Gondwe, announced that government will release details of the comprehensive audit report by the British forensic auditors later in August.

He said this at a press conference where he disclosed that government had launched a fresh forensic audit at State House, Malawi Defence Force (MDF) and Malawi Police Service (MPS) as part of a probe into the Cashgate.

He explained that the decision to audit the three institutions is a follow-up to the recommendation by the previous report of the auditors.

Gondwe pledged that there would be no “sacred cows” in pursuit of justice regarding the K13 billion (US$31 630 170) public finance scandal.