Secretary to the Treasury Ronald Mangani says when he appeared before the joint parliamentary commission, he never said Agricultural Development and Marketing Corporation (Admarc) breached the trust of both the Treasury and the Reserve Bank of Malawi (RBM).
He was reacting to a report on the meeting at Parliament building in Lilongwe on Thursday that appeared on the front page of The Nation of Friday, January 27 2017 titled ‘Admarc breached our trust –Treasury.”
“I never said that. I never said that these people have breached our trust.
“I gave the background to say that government is an institution of trust. I said that we pass on funding to government agencies, ministries and departments on trust that they are going to use the money as per the intended purposes,” Mangani stated.
He acknowledged that he was persistently asked by commission members whether Admarc’s questionable arrangements in procuring the maize from Zambia meant that the State corporation had done something wrong, like breaching the Treasury’s trust.
“I kept saying that’s up to the commission to establish. That’s why you have called us. We have given you what we have done on this transaction. It is up to you to judge, based on the information we have given you,” Mangani recalls telling the commission, stressing that he did not pass judgement on Admarc’s conduct.
When asked why Treasury had not followed up on every stage of the Admarc transaction, Mangani says he pointed to systemic operations that do not necessitate such close monitoring.
“I said no, we cannot do that because if we do that—if we get involved at every stage of the transaction—first of all, why do they have boards? Why do we have internal audits? Why do we have external audits?’
“I said all these things. So, we fund on the assumption that people are going to do what they say they are going to do—on trust,” he stressed.
Mangani stated that chief executive officers in parastatals are controlling officers acting on delegation from the Treasury, to the effect that on financial matters, they will act according to legislation, within guidelines, rules and regulations set out in several key documents like the Public Financial Management Act and the Procurement Act.
He clarified that the other issues he told the commission included:
That he wrote RBM, and not Admarc, on July 4, 2016 over a letter of credit on the maize transaction.
That the gist of his message was that Treasury is not responsible for procurement, even if the project owners may merely ask the Treasury to validate whether the resources are present or not and whether there is value for money in the projects. However, whether the contracts are structured properly, or not, is the responsibility of the controlling officers.
That the way the Public Procurement Act stands now, it does not obligate funding beneficiaries to send copies of contracts to the Treasury.
That Treasury has the responsibility to conserve the trust government operates under, otherwise, the institution of government would collapse.
Concluded Mangani: “Everybody in that interview actually commended how the Treasury had handled this transaction. I came out of that interview with everybody congratulating me that the Treasury did what it could do.
“People applauded the Treasury. MPs [members of Parliament] applauded the Treasury, saying the Treasury has done its job.”
Mangani, alongside other senior Ministry of Finance, Economic Planning and Development officials, last Wednesday appeared before the joint committee to answer questions on the ministry’s role in the maize procurement from Zambia.