Thirteen ministries out of 20 failed to submit their 2015/16 financial statements by November 20 2016 to National Audit Office (NAO) and Treasury has warned that they would not get their payments and January funding.
Ironically, key institutions that are supposed to lead by example such as Ministry of Finance, State House and NAO have also not complied with the order.
Even worse is the revelation that, the author of the circular to the MDAs, Ronald Mangani, is the technical head of the Ministry of Finance, but his ministry has also not yet submitted its report.
And NAO, the country’s supposed pinnacle of public finance management assurance, has again been found napping—fresh from a financial scandal where external auditors exposed the institution that it failed to account for K200 million.
Governance expert Anthony Mukumbwa has described the scenario as a serious national corporate governance crisis, but has argued that while Mangani had no moral ground to issue the letter; other institutions should not be allowed to use that as an excuse.
The letter from Mangani, which Nation on Sunday has seen, warns all controlling officers who failed to submit the 2015/16 financial statements by December 31 2016, that their payments will not be processed by the AG’s Department.
“You will recall that the Auditor General, through his letter of November 2016…Ref. No/NAO/27/2 requested all MDAs to produce and submit to his office the financial statements for the year-ended June 2016 by November 30 2016.
“Regrettably, some MDAs have not complied with the circular. Please note that the delay to submit the financial statements is affecting delivery of the 2015/16 audit report, which is a prior action for a number of development partners to assist the country with budget support,” Mangani’s letter reads in part.
In an interview yesterday, Mangani said since the issuance of his letter, some MDAs were responding to the call to submit the reports but he failed short of disclosing their identities.
Tackling the irony that Finance Ministry, where he is the technical head was among the culprits, Mangani said work is delegated and there were officers that were supposed to do that.
He claimed that the Ministry of Finance has regularised its vote, but he could not take further questions as he said he was catching a flight.
But according to Treasury’s communication, key ministries such as Agriculture, Irrigation and Water Development, Education, Science and Technology, Health and Information, have not complied with the AG’s circular.
But acting principal secretary (PS) for Health Chimwemwe Banda in an interview yesterday said her ministry sent its financial statement to NAO before the letter from Treasury, dated January 17 2017, was received.
PS for Ministry of Information Justin Saidi, while admitting that his ministry was yet to send the financial statement, said the process was at an advanced stage.
Other ministries we failed to contact for their comments include Home Affairs and Internal Security, Labour, Youth, Sports and Manpower Development, Transport and Public Works, Natural Resources, Energy and Mining, Defence, and Local Government and Rural Development.
Also included among the non-compliant MDAs which may not receive their January funding—where salaries also come from—are watchdog and governance institutions such as the Anti-Corruption Bureau, Office of the Ombudsman, Law Commission, Malawi Human Rights Commission, Legal Aid and Malawi Electoral Commission.
Parliament, one of the organs tasked with roles that include legislating laws and providing checks and balances, is also among the culprits, according to the list.
Security organs, namely Malawi Police Service, Malawi Defence Force and Immigration Department and the public tax collector Malawi Revenue Authority have also not complied with the order.
Other non – compliant institutions include Roads Fund Administration, National Statistical Office and Financial Intelligence Unit.
Mukumbwa said submission of such financial statements was a standard requirement in public finance management.
He wondered what Parliament, which will meet soon for the midterm budget review performance, would be reviewing if no financial statements have been submitted, including that from Parliament itself.
“Controlling officers must be taken to task. This is despicable.
How can Parliament meet for say, a budget review, without an audit report? Submission of these financial statements is one way issues such as Cashgate can be detected,” he said.
Chancellor College economist Professor Ben Kalua said government, as a principle, mandates MDAs to deliver different roles, adding that where they fail to deliver, government fails and everyone fails.
Kalua said it was a clear governance failure where government fails to abide by something it set.
Some of the ministries that have complied include the Disaster and Relief Management, Foreign Affairs and International Cooperation, Gender, Children, Disability and Social Welfare, Justice and Constitutional Affairs and Trade and Industry.