For nearly eight months, Parliament has not acted on the PricewaterhouseCoopers’ (PwC) data analysis report, which revealed that K577 billion of taxpayer’s money was unaccounted for between 2009 and 2014.
This week, the Public Accounts Committee (PAC)-mandated by law to scrutinise government accounts on Parliament’s behalf-blamed its inaction on funding woes.
But Treasury shot back, saying it has been releasing funding to the National Assembly; hence, it was up to the Legislature to allocate resources to activities.
Parliament’s inability to scrutinise the report-titled Final Analysis Report: Reconstruction of the Malawi Government Cashbook for Purposes of Further Investigations and was a precursor to a forensic audit-is in sharp contrast to the urgency they displayed during the last budget meeting to have the document.
When reports emerged mid last year that what was initially assumed to be the ‘K92 billion Forensic Audit Report’ was out, Parliament—especially the opposition side—wanted the document so badly they threatened to torpedo the 2015/16 National Budget which was on the House floor at the time had the Executive not tabled it.
There was a general feeling that the Democratic Progressive Party (DPP) administration wanted to downplay the report ostensibly because part of the potential mismanagement may have happened on their watch with the late Bingu wa Mutharika as president.
Under pressure, Finance, Economic Planning and Development Minister Goodall Gondwe submitted the report to the House that turned out worse than expected: in the five years leading to December 31 2014, the DPP and People’s Party (PP) led government let the potential looting of K577 billion, roughly a third of what government spent during the period, slip through their fingers..
Thus, the potentially stolen sum turned out to be much bigger than the K24 billion that British audit firm Baker Tilly said disappeared between April and September 2013 under the administration of Joyce Banda and K92 billion under the regime of Bingu between 2009 and 2012 combined.
That suspected fraud has crippled government operations as the heavily indebted and cash-strapped Capital Hill does not have adequate funds to consistently finance even the most sensitive of sectors such as health on the back pf aid freeze largely caused by such blatant theft and below-budget tax revenue.
Donors that assist Malawi with direct budget support have time and again expressed concern over the slow pace at which government is working to deal with the fraudulent activities.
Roughly eight months later, the report-whose handling could be one of the keys to unlocking direct budget support-appears to have lost the ‘fierce urgency of now’ that burned through the veins of members of Parliament (MPs) last June.
In fact, as the MPs meet this month to review the very budget they wanted to sabotage due to the PwC report, PAC will have nothing to present to the House on the K577 billion issues as was expected.
PAC chairperson Alekeni Menyani told Weekend Nation in an interview on Thursday that the committee has not met and will not report anything during the Mid-Term Budget Review meeting scheduled to start on February 22.
Said Menyani: “It was expected that [PAC] would report back to the House on the K577 billion Report as it was directed by the House because the position of Parliament through the Public Accounts Committee is critical in this matter. But Parliament has not been funding the committee so there is nothing to report.’’
According to Menyani, his committee tried to sound an SOS to Treasury to fund the committee but the message fell on deaf ears.
He said this means the committee failed to fulfil its oversight duty of scrutinising the issue, thereby denying Malawians the right to know the truth on the suspected looting.
MCP spokesperson on finance in Parliament, Joseph Njovuyalema, on Thursday said Treasury should find money for PAC to meet and report back its findings on the fraud.
“As a party, we expect the Public Accounts Committee to report back during the forthcoming budget review and Treasury should make sure that it funds the committee to scrutinise the K577 billion audit report,’’ said Njobvuyalema.
Leader of People’s Party in the House and the party’s acting president Uladi Mussa yesterday concurred with MCP that government should ensure that the committee meets to scrutinise the report so that Malawians know what happened to their taxes.
Said Mussa: ‘‘It’s high time this matter was put to rest and Malawians knew the truth about it just like what happened with the K24 billion cashgate scam.’’
Another opposition MP, Kamlepo Kalua, who was very vocal in agitating for the report to be tabled in Parliament last year, said the country is facing serious issues in as far as governance is concerned and wondered how government that is caring for its people could ignore a constitutional obligation that PAC should scrutinise the K577 billion scam report.
‘‘I feel this is a deliberate move by the Executive in order to shield people that embezzled public funds,“said Kalua.
But Treasury spokesperson, Nations Msowoya, on Wednesday said funding problems cannot be blamed for PAC’s failure to meet because government has been funding the National Assembly.
Said Msowoya: “We have been providing funds to Parliament and the decision on what activities should be funded is made by Parliament’s secretariat.”
Chief public relations officer for the National Assembly, Leonard Mengzi, yesterday said the committee was allocated three weeks for the meetings in the 2015/16 financial year. The committee met for two weeks in 2015 meaning it has only one week remaining to examine the report.
Said Mengezi: ‘‘Looking at the [size of the] said report, the remaining week may, therefore, not be enough for the committee to consider it. In this case, while there are issues of inadequate funding just like in all other government ministries and departments, the main issue as to why the committee is yet to consider the report is time limitation.’’
He said Parliament was committed to ensure that the report is considered by the committee at the earliest time possible.
Economics Association of Malawi (Ecama) is appalled that eight months on, PAC has not discussed the issue.
Ecama president Henry Kachaje said the development might render Parlaiment’s mandate of providing checks and balances to the Executive ineffective.
PAC’s inaction is also expensive for the taxpayer, said Kachaje.
“The failure of this committee to do its duty will have cost implications as the next sitting of Parliament might again fail to reach consensus on the matter in the absence of the committee’s report,” he said.
Forensic audit underway
Meanwhile, the National Audit Office (NAO) said this week that the K577 billion forensic audit-which was supposed to follow the data analysis report-is underway.
NAO said the exercise covers planning, risk assessment, execution and application of audit tests, evidence gathering and drawing of conclusions and reporting on the audit findings following the prescribed procedures.
In an e-mail response on Wednesday, NAO spokesperson Lawrence Chinkhuntha said a forensic investigation such as this one requires thorough planning; hence, needs more time.
Said Chinkhuntha: ‘‘You will recall that the Auditor General issued a press statement in June 2015, indicating that the final results would be ready after 10 months.
‘‘Although we faced delays in the procurement of special audit services, we are doing our best to meet our set timelines. The work is thus in progress and the audit report will be issued in accordance with the provisions of the law as soon as it is ready.”
The K577 billion fraud, apart from stoking up anger among Malawians, also sparked security and diplomatic concerns.
Last August, thugs broke into the house of a high ranking German official handling the issue and stole a laptop which contained Cashgate-related documents and office keys.
German Ambassador Peter Woestse—whose government funded the data analysis—said the burglary could be politically-motivated.
The donors, who are mostly funding the forensic audit, have since said they have tightened security around the exercise this time around. n