The continued lack of expenditure controls as evidenced, for example, by the fact that “there has not been a single month of bank reconciliation” two years after Cashgate; government’s failure to produce audited accounts; poor financial reporting and oversight, are some of the problems that forced the EU to give up on the Mutharika administration, at least in the current and next fiscal year.
Even implementation of initiatives aimed at helping Capital Hill to improve the situation over the years has faltered with time.
For example, according to the EU report, in 2013 the Malawi Government started implementing the Financial Reporting and Oversight Improvement Project (Froip). At the time, the donor’s rating on Froip was “moderately unsatisfactory”. But by December 2015, government’s performance on this benchmark was outright “unsatisfactory”.
And for not releasing a single audited financial statement, the EU’s rating of the Malawi Government on Froip is “prolonged unsatisfactory”.
Government’s failures to accelerate PFM reforms to restore trust and confidence in the budget process; pass the Access to Information (TI) Bill and implement Farm Input Subsidy Programme (Fisp) reforms are the other misses on EU targets.
The EU report also says there is lack of coordination with donors. For example, it said, for seven months, there has been no meeting of the Group on Financial and Economic Management (GFEM), which government promised to resume with development partners on a monthly basis.
Noting that the Cashgate revealed in 2013 was not a singular misappropriation of government funds, but the tip of an iceberg of long-existing practices going back to previous governments, the EU report called for more action from the reforms crowd.
‘‘There is need for a quicker, more thorough and bolder action on public sector and public financial management reforms programme,’’ it said in the report.
In an interview on Wednesday, EU Ambassador to Malawi Michael Germann said he could not comment on the matter because the union was still waiting for an assessment by an independent verification exercise on direct budget support to Malawi for the 2016/2017 financial year.
Said Germann in an e-mail response: ‘‘EU is still in the process of assessing the eligibility criteria with regards to the General Budget Support to the Government of Malawi.’’
“This will be done on the basis of the findings of an independent team of experts that has been commissioned to verify progress made. At this stage we would not want to pre-empt the outcome of this exercise,’’ said the ambassador.
The assessment report the ambassador is referring to is the one Weekend Nation has seen, but is yet to be made official.