Govt payment system collapses, as donors urge swift probe into Mphwiyo saga

The Integrated Financial Management System (IFMIS)—the Malawi Government payment platform at the centre of recent investigations into alleged theft of public funds—has collapsed, the Accountant General confirmed Friday.

News of the system’s failure came as sources from the Ministry of Finance and the Auditor General’s office confided in Weekend Nation that government has shut down IFMIS pending investigations into alleged pilferage of public money through the computerised platform.

The depth and breadth of probes into civil service largesse by governance institutions and security agencies follow the shooting of budget director Paul Mphwiyo at his house in Area 43 in Lilongwe two weeks ago for reasons that Malawi President Joyce Banda said—a day after the attempted assassination—were connected to the fiscal technocrat’s crusade against fraud and corruption in government.

The Office of the President and Cabinet (OPC) reinforced that view less than two days after Banda’s declaration in a statement that perpetuated the presidential narrative.

IFMIS shut down

Yesterday, sources said Accountant General David Kandoje and Auditor General Stephenson Kamphasa met on Thursday and resolved that IFMIS be shut down to smoothen investigations into how the system was turned into a pilfering tool and by who. Treasury apparently agreed to the switch-off, according to sources.

But yesterday Kandoje said the government accounting system is off-line because it has developed a major fault, dismissing reports that authorities have suspended its use in connection with the Mphwiyo shooting and the subsequent investigations into alleged fraudulent movements of cash from government accounts into private hands.

“I know that people will look at this as too much of a coincidence given what has transpired over the past couple of weeks.

“But the fact is that IFMIS developed a major fault on Wednesday and our IT [information technology] experts are working on it. It may take a bit of time to rectify the problem, that is why we have temporarily gone back to processing payments manually, including issuing of cheques,” he said.

Kandoje, however, said it is possible that government can take advantage of the IFMIS breakdown to investigate the weaknesses in the system that has resulted in loss of huge sums of money.

He also said the IFMIS version Malawi is using is outdated, having been in use since 2005.

Asked to specify what ails IFMIS, Kandoje said he would not know since he was not an IT expert.

He admitted that the system failure may delay payments given that the transition from an automated system into a manual one may bring complications that could lead to pay hold-ups.

Government abolished manual system of authorising payments, including funding to ministries, loans, gratuities and pensions in favour of the electronic IFMIS platform eight years ago.

The system, adopted from Tanzania where it is now reportedly defunct, was intended to close loopholes that led to government losing billions of kwacha to fraudsters.

But as the chain of events that followed the Mphwiyo shooting shows, the system has had little success.

Donors caution

While the police—who are holding three people in connection with the shooting—and other security as well as intelligence agencies are hunting people who attempted to kill Mphwiyo as well as probing their motives, the Anti-Corruption Bureau (ACB) has stepped up wide-ranging investigations into allegations of fraud and corruption in the civil service. The Financial Intelligence Unit (FIU) has also joined the fray.

ACB last Thursday arrested two public officers after receiving a complaint alleging that an officer from the Accountant General’s office was conniving with Malawi Police Service officers to corruptly defraud government of huge sums of money.

Meanwhile, eight donors—British High Commission, the Delegation of the European Union to Malawi, the Embassy of the Federal Republic of Germany, the Embassy of Iceland, the Embassy of Ireland, the Embassy of Japan, the Embassy of the Kingdom of Norway and the Embassy of the United States of America—on Friday released a joint statement urging quick action on the several allegations that came flying into the public domain after the Mphwiyo gunning.

“We are greatly concerned about the reported events surrounding the shooting of the budget director Mr Paul Mphwiyo. These are worrying developments that potentially risk Malawi’s stability, rule of law and reputation. We urge swift and credible investigations that leave no stone unturned, allowing the investigating authorities to act without fear, intimidation or hindrance. Should the Malawi authorities require international assistance to their investigations into this and other cases, we are willing to respond.

“There has been growing concern in Malawi about corruption. We welcome the government’s acceptance that much more needs to be done. We encourage further political will to support the determination of those prepared within government and in State institutions to act against corruption, building on the recently announced measures to strengthen accounting systems and controlling measures. We encourage a strong coalition with others in Malawi society to ensure success and confirm our continued support to them in order that we achieve results,” they said.