The Malawi Police Service (MPS) Fiscal and Fraud Section is investigating a local charity, Chinansi Foundation, on allegations that it mismanaged about K65 million from Global Fund.
In its investigation report dated June 16 2021, the Global Fund alleges that Chinansi Foundation, a Balaka-based non-governmental organisation (NGO), abused $70 572 and $9 924 (about K65 million).
In the report, the Geneva-based world’s major international partner in the fight against HIV and Aids, malaria and tuberculosis (TB), further states that it lodged a complaint with the local Fiscal Police on allegations that the foundation’s former executive director and senior members abused funds meant for a programme targeting vulnerable adolescent girls and young women.
But the former executive director Simplex Chithyola, now member of Parliament for Kasungu South, has denied the accusations, saying the NGO has evidence to prove the funds were not abused.
When contacted on July 3 2021, he said he would drive from Salima where he claimed he was at the time to Blantyre to present his side of the story and documents to Nation on Sunday, but by press time yesterday, he had not.
In an interview, National Police spokesperson James Kadadzera confirmed that the Global Fund lodged a complaint, adding Fiscal Police have since started investigating the matter.
Plan International Malawi, which subcontracted Chinansi Foundation for the project, said in a response to a questionnaire the case was no longer in their hands due to its nature.
Plan International Malawi communication and campaigns manager Rodgers Siula said police and the Global Fund have together conducted a detailed investigation since August 2019 to understand the nature of the case and to inform future funding from Global Fund to the Malawi Government and the broader civil society.
He said: “The findings presented in the report provide details of the conclusion of the investigation. The investigative report further presents recommendations for improvement across all players involved.
“[At] Plan International, we take issues of fraud, bribery and corruption seriously and in support of this commitment, we have a zero tolerance policy on all fraud, bribery and corruption. In essence, we require staff, partners and volunteers at all times to act honestly and with integrity, and to safeguard all assets entrusted to the organisation.”
Siula said it was in Plan’s best interest that the recommendations stipulated in the report are acted upon accordingly and timely.
ActionAid International Malawi executive director Assani Golowa Phiri, whose organisation received the Global Fund resources and subcontracted Plan International Malawi, said in an interview they were aware of the Global Fund report.
Said Phiri: “But the flipside of all this is that the Global Fund report is not conclusive. Police in Malawi are still investigating the matter. There are always going to be issues in audit reports.”
On his part, NGO Board executive director Voice Mhone in a written response said some Chinansi Foundation employees first reported the matter to the board in April 2019.
He said: “The employees alerted us that funds were being abused and that they were not getting their salaries. We investigated the issue and established exactly what has been reported by the Global Fund.”
Mhone said such developments affect the image of the NGO sector and could make donors withdraw their support to the detriment of poor Malawians.
“Going forward one of our reform areas is to strengthen NGO governance so that power is not be concentrated in one person,” he said.
In the report, the Global Fund alleges that senior executive members at the NGO, an implementer of Global Fund grants in Malawi, engaged in opportunistic fraudulent activity.
Global Fund states that it received an allegation that the executive director of Chinansi Foundation, a sub-sub-recipient of Global Fund grants, had misappropriated funds, resulting in delayed activities and salary arrears.
Reads the report in part: “The staff submitted fabricated bank statements to conceal the wrongdoing. Additionally, there were non-compliant expenses amounting to $9 924, due to inadequate supporting documents and irregular procurement of vehicle hire services.
“As a result, the Global Fund asked the Local Fund Agent [LFA] to perform a review. However, the executive director denied the LFA access to critical books and records. Desk research identified that Chinansi Foundation was under-performing programmatically and significantly overspending on salaries. Chinansi Foundation stood to receive up to $700 000 [about K570 million at the current exchange rate] by the end of 2020.”
The report further states that Global Fund later liaised with MPS’ fiscal unit throughout its investigation, adding the police provided copies of Chinansi Foundation bank statements obtained under judicial warrants.
“A further $9 924 of non-compliant expenditures in the grant programme resulted from non-transparent procurements and unsupported expenditures. Weak governance within Chinansi Foundation facilitated the wrongdoing,” it reads.
Chinansi Foundation, from April 2017 to August 2019, implemented the programme targeting vulnerable adolescent girls and young women for Plan International Malawi, a sub-recipient of the Global Fund grant under principal recipient ActionAid International Malawi.
The NGO continued in this capacity until Plan International Malawi suspended it in 2019 after the allegations were reported.
Global Fund has demanded that the alleged misappropriated funds be recovered and the NGO has been barred from implementing Global Fund grants.
Chithyola, in the brief interview, said all programmes were carried out and they have records to prove it.
He said some of the issues the Global Fund queried were on the NGO’s decision to pay Malawi Revenue Authority (MRA) in cash instead of cheques as recommended by the donor.
Said Chithyola: “MRA declined to receive cheques from us, as Chinansi Foundation was considered a small organisation.
“The issue centres on some activities they rejected. They admit all the activities were done, but they are rejecting the costs.”
The Global Fund, which previously withdrew its funding from the State-funded National Aids Commission of Malawi due to alleged abuse of funds, invests $4 billion a year to the fight against HIV, TB and malaria.