Minister of Finance, Economic Planning and Development Goodall Gondwe has said fraudulent activities if left unchecked in government, will derail implementation of some projects outlined in the 2016/2017 National Budget.
Gondwe’s sentiments follow fraud reports and wastage of public funds in various ministries, departments and agencies (MDAs).
Recently, there have been rampant reports of abuse of public funds, especially at district councils under the Ministry of Local Government. For instance, a few weeks ago the Anti-Corruption Bureau (ACB) pounced on Mangochi District Council on suspicion that some public officers were involved in corrupt practices. ACB is also probing Karonga and Mulanje district councils for corrupt practices.
Gondwe said there was need to scale up efforts to reduce fraud in MDAs. But he said he was happy that at central government level, efforts have been undertaken and loopholes in the Public Finance Management System have been sealed.
Said Gondwe: “Fraud will always be there despite how tight public financial management systems are. So, there is going to be fraud, but we are happy that the Cashgate type of fraud has been curbed, a lot of it has been curbed.”
“We have closed most of the loopholes. Hopefully, this will significantly reduce fraud in the public service as the Auditor General recently said.
We can say there has been a 90 percent reduction of Cashgate type of fraud so far,” he explained.
However, the minister could not say the same applies to other agencies in government following widespread reports of theft in various ministries.
In August 2016, K2 billion was reported stolen at Ministry of Health (MoH). Additionally, in December of the same year, a National Audit Office (NAO) report implicated over 63 officials from the ministry in theft of public funds.
I n M a r c h 2 0 1 6 , t h e Parliamentary Committee on Agriculture asked government to investigate reports that over 50 percent of the money allocated to the Ministry of Agriculture, Irrigation and Water Development was stolen.
Over 70 civil servants at the ministry were interdicted last year for allegedly being involved in fraud. But spokesperson for Ministry of Local Government, Muhlabase Mughogho, said most of the fraudulent activities were conducted in collusion, hence it was difficult to establish the truth.
“We have a number of initiatives to ensure that systems of internal controls are effective, including full utilisation of local authority Ifmis [Intergrated Financial Management System] replacing all manual transactions.
“Whenever we have confirmed cases of abuse, culprits are being taken to task. So far, audits have been done in Karonga, Phalombe, Mulanje and Mangochi,” she said.
In an interview, Malawi Economic Justice Network (Mejn) executive director Dalitso Kubalasa called for resolute ways to deal with fraud in MDAs.
Said Kubalasa: “There is need for a decisive action by the Ministry of Finance to uproot fraudlent activities within government structures. The government should go after those that are stealing its money and bring them to book, which includes the recovery of the money.
“People need to see such a demonstration of resolve. But we are seeing that the government actions are rather too slow let alone bearing any fruits. The rate of plunder of public resources is quite huge and it is worrying.”
He said government should not surrender the fight against fraud because it has always been there.
“But despite the fact, we should not sound as if it is impossible [to curb fraud]. In fact, the honest assessment by the minister should be the fulcrum to push government to deal with the problem,” Kubalasa said.
Quizzed on what government intends to do in dealing with the vice, Gondwe said the first step is to ensure that MDAs are audited.
“We are basically doing two things; we have an internal audit unit at the ministry which we are sending out into MDAs to audit their accounts. Their mission is first to establish the extent of fraud and the people involved but also the methods that they are employing to defraud the government.
“These audits are going to be regular. Of course, as at now we have sent the team to districts where reports of fraud have been received such as Karonga, they will also be in Mzimba and Mulanje among many other districts,” he said.
Secondly, said Gondwe, the government is moving in, to build the capacity of people who handle public resources especially in district councils after noting that there is poor financial administration mainly due to lack of skills.