K100 billion goes unaccounted for

Government ministries, departments and agencies (MDAs) and local councils have in five years failed to account for over K100 billion with requisite documentation while law enforcement agencies have not investigated or prosecuted suspected perpetrators.

This revelation comes after Nation on Sunday browsed through audit reports covering 2015 and 2020 which the National Audit Office (NAO) published after carrying out investigations into national budget expenditure.

The analysis established that every year, billions were spent without the MDAs and councils providing documentation to NAO in support of a range of payments including fuel, construction projects and other supplies.

Minister of Finance and Economic Affairs Sosten Gwengwe confirmed government’s laxity to hold accountable public officers who fail to account for public resources.

The minister was, however, quick to say government will now ensure that audit reports’ recommendations are implemented and that perpetrators are punished in line with the new Public Finance Management Act.

But Centre for Social Accountability and Transparency (Csat) executive director Willy Kambwandira said some MDAs deliberately destroy documents to conceal evidence of abuse of funds.

He said: “These are strategic ways of looting public coffers. There is no way in a government system, let alone at any institution one would process payments without supporting documents. This is collusion among public officers.”

Within that period, the MDAs cumulatively failed to account for over K80 billion while the councils could not provide proof of expenditure for about K22 billion.

The worst year for the MDAs was 2015 when about K30 billion was not accounted for with the Ministry of Agriculture being the main culprit after it failed to provide documentation for K16.8 billion.

The second worst fiscal year, according to our assessment, was the 2019/2020 financial year when about K26 billion went unaccounted for. During that year, the Malawi Police Service was the major offender, having failed to account for over K16 billion.

In the 2019 financial year, K10 billion was not accounted for. And, in 2018, the missing documents and unsupported payment vouchers totalled K5.6 billion while in 2017, it amounted to K7.3 billion.

The financial year ending June 30 2016 was the best in the public finance management as the amount of unsupported payment vouchers was about K517 million.

For the local government councils, the worst year was in 2015/ 16 when a joint audit revealed that around K10 billion was unaccounted for. The year 2017 was the second worst with K4.5 billion spent without supporting documents.

Our calculations further show that in 2018, K4.4 billion was not accounted for while in 2020, about K2 billion was not accounted for. The year ending June 30 2019 showed that councils were more prudent as only K175 million was not accounted for.

According to Csat, there is little commitment to investigate and prosecute officials suspected of abusing funds despite recommendations by the Auditor General.

Said Kambwandira: “It is, however, sad that despite all these revelations recommendations of audit reports are largely ignored.

“We are not seeing genuine sanctions being taken against public officers involved. Parliament’s approach to audit reports remains casual and reactive. This is what is fuelling this continued looting of public coffers.”

But Gwengwe acknowledged that there was lack of effort in ensuring that officers that do not account for public funds face the law.

He, however, stated that they have set up mechanisms that will help implement the recommendations of the audit reports, warning that perpetrators will be punished.

“There are mechanisms for tracking and following up where those cases are and those that require law enforcement agencies to be passed on in good time,” he said.

Gwengwe further said the ministry has improved its working relationship with the police and the Anti-Corruption Bureau “so that we handle these issues holistically with these institutions”.

On his part, former minister of Finance Joseph Mwanamveka, who was in-charge between 2017 and 2020, observed that some payment documents are lost through negligence.

“Some cases of missing documents could be genuine because there are a number of stakeholders that are involved from procurement and documentation,” he said.

Mwanamveka, however, pointed out that failure to account for money does not always mean that money was lost.

He said: “People make mistakes. When there is an audit query, that does not mean money was lost. In some cases, it happens, for example, a department bought a vehicle and it was delivered after everything was followed. But when the auditor comes and asks where the payment voucher is and who authorised it and when they don’t find it there will be an audit query.”

Mwanamveka blamed weak laws as being behind government’s failure to pursue those who fail to account for public funds.

“This is why we [Democratic Progressive Party government] started review of the Public Finance Management Act which has been discussed and passed in Parliament. It has been strengthened,” he said.

The Parliament’s Public Account Committee (PAC) serves as a check on the government and its primary function is to examine the audit reports.

PAC chairperson Shadreck Namalomba said they will ensure that, through the new Public Finance Management Act, top government officials are punished for failure to enforce the rules.

He said: “Now that we have a new Act, we ask the controlling officers to sanction officers who fail to account for the public function…We are now going to make sure that when there is an anomaly, we will be questioning the controlling officers, did they censure the responsible officers? Did you sanction those involved?

“If they did not sanction the officers, we will be recommending that the controlling officers [principal secretaries] must be sanctioned for disciplinary process. The controlling officers will be the ones to lose their jobs.”

Namalomba stated that some of the queries raised by the Audit General’s report are serious and require deep probing.

He cited an audit finding that the vehicle for the Department of Nutrition in the Ministry of Health got fuel valued at K350 000 in a day.

He queried: “This was in 2019 when fuel was much cheaper. This means that the vehicle got approximately 500 liters of fuel in a day. What type of car can use all that fuel in a day? Even if you are driving to South Africa, you cannot use that much.”

The new Act which is an upgrade of the past legislation outlines stiff punishments such as a K50 million fine for public officers that flout taxpayers’ disbursement procedures.

According to Section 110, the offences include failure to exercise controls over the receipt, custody or utilisation of public resources; concealling of information that is required to be recorded and issuance of improper payment of public funds.

“A person who commits an offence under subsection (1) shall, upon conviction, be liable to a fine of K50 000 000 or the financial gain derived from the offence, whichever is greater, and to imprisonment for twelve years,” reads the section in part.