Malawi tightens payment system
Treasury has announced the tightening of controls in the government payment system commonly known as the Integrated Financial Management Information Systems (IFMIS).
The development comes against the background of controversy surrounding the shooting of Ministry of Finance budget director Paul Mphwiyo on September 13 2013 with speculation high that the incident followed a monetary deal gone sour.
The new measures, mostly targeting cheque payments, are contained in a circular from Treasury dated September 19 2013.
The statement also comes one month after government announced almost similar measures on August 1 this year during a press conference attended by Minister of Finance Ken Lipenga and Mphwiyo himself.
Besides the previous measures, the circular has added that apart from controlling officers or their designated senior officers, all cheques from ministries and government departments should be countersigned by both the Accountant General and the budget director or the two officers’ designated representatives.
“This will further strengthen reconciliation of funding and cheque issuance and ensure that spending is within the funding limits,” reads the statement signed by Treasury’s principal secretary for administration Newby Kumwembe.
During the August press conference, Lipenga decried the weak control systems within the government expenditure mechanism which, he said, were costing the country heavily through fraud and unnecessary waste of resources.
He specifically pointed out that a lot of resources are being lost through the IFMIS which he said has a number of weaknesses to effectively safeguard public finances.
Soon after Mphwiyo’s shooting, government said he was targeted because of his fight against corruption and fraud although stories from other circles suggest the contrary.
Treasury spokesperson Nations Msowoya as well as Kumwembe and Secretary to the Treasury Randson Mwadiwa could not be reached to explain why the controls have to revised now and immediately after Mphwiyo’s shooting
Among the measures which Kumwembe says are with immediate effect are that government will engage an independent auditor to electronically audit the IFMIS on a regular basis to help detect any irregularities that have taken place as well as to identify risks that must be addressed to strengthen internal control.
The new measures also stipulate that internal auditors would be required to pre-clear all payments above K500 000 (about $1 250) while vouchers for such amounts will be required to bear a designated stamp denoting approval.
The statement also says that registers will be introduced to link funding and cheque issued with each beneficiary department required to compile a list of cheques issued, stating the beneficiary, names of signatories, cheque amount, cheque number and a brief description of the expenditure.
