Govt cries for mercy
Treasury has gone down on bended knees, pleading with the World Bank for softer repayment terms for the refund of about K400 million the bank is demanding following misprocurement of project components.
Ministry of Finance, Economic Planning and Development spokesperson Nations Msowoya confirmed in an interview yesterday that government has engaged World Bank in negotiations on the repayment mode.
He said government had requested the bank to allow Malawi make the refund in phases and over a longer period.
Said Msowoya: “We are negotiating with the World Bank to allow us to refund the money over a longer period of time beginning next financial year since the funds were not budgeted for this [financial] year.”
He said the move would allow government to ensure that nothing suffers, especially the core activities under the Ministry of Finance.
Following a recent inquiry that exposed the misprocurement in a World Bank-funded project managed by Treasury, a government arm delegated to keep the public purse and set fiscal standards, the World Bank demanded a refund.
The funds are under the $19 million (about K13 billion) Financial Reporting and Oversight Improvement Project which started in March 2013 to strengthen systems to avoid a repeat of Cashgate. It was scheduled to end in June this year.
However, the findings came barely a month after a latest government forensic audit showed that fraudulent procurement was the foundation of Cashgate.
Primarily, the project sought to boost the internal controls, accounting, reporting and oversight of government finances at the central and decentralised levels in the country’s Ministries, Departments and Agencies (MDAs).
Specifically, it was discovered that Treasury bought a second-hand printer and computers which were bought to improve accountability, oversight and reporting of government finances.
Asked what Treasury was doing following the anomaly, Msowoya said the ministry was re-examining the issue and will soon determine the remedy.
He said: “Treasury is reviewing the decision-making process by the project team to determine what remedies it can apply.”
Initially, Msowoya indicated government was exploring the option of cashing the suppliers performance bond, but in yesterday’s interview he said government failed to cash the bonds because “it was too late when we discovered that the computers were second-hand”.
When contacted on the issue yesterday, World Bank communications officer Zeria Banda asked for a questionnaire, but said she needed time to follow up on the matter before commenting.
However, in an earlier interview with The Nation World Bank country manager Laura Kullenberg said her office requested for a refund for computers and a printer because as part of their fiduciary responsibilities and oversight for World Bank Group funded projects, they take procurement issues seriously in order to ensure client countries receive value for money from the projects.
The project’s implementation status and results report released in April 2016 notes—in the context of the project’s relevance to Malawi—that the recent Cashgate in which billions of kwacha were looted from public coffers highlighted the immediate need to address the long-lasting public financial management problems.
This was not the first time for World Bank to ask Malawi to refund money over either failure to comply with procurement procedures or lack of accountability.
Early this year, the bank also asked the Ministry of Agriculture, Irrigation and Water Development to refund K2.1 billion in outstanding advances for the Agriculture Development Programme Support Project (ADP-SP).
In January 2015, the World Bank withheld disbursement of any project funds untild Dowa District Council reimbursed K32.9 million meant for Local Development Fund (LDF)-supported Public Works Programme (PWP).
