RBM confirms clearing Cashgate cheques
Two officials from the Reserve Bank of Malawi (RBM) have told the court that they cleared cheques worth billions of kwacha during the Cashgate period between April and September 2013 based on a memorandum of understanding (MoU).
The officials said the MoU between the government, commercial banks and the central bank expressly gave instructions that all government cheques be cleared; hence, votes for ministries, departments and agencies (MDAs) ended up being overdrawn against allocations approved by Parliament.
The central bank officials disclosed the details in their testimony yesterday in the ongoing K2.4 billion Cashgate case involving government officials, among them former Ministry of Finance budget director Paul Mphwiyo and former Accountant General David Kandoje and contractors.
Votes custodian at RBM, Judith Masangwale, who was a bank teller at the time of Cashgate in 2013, told the court that she was aware that there was an MoU that the government entered into with banks to clear its cheques.
She said it was not her duty to check the legitimacy of the payment.
Said Masangwale: “The government operates on a deficit, on anticipated revenue. I know that even if the government had no money, we still had to clear the cheques for payment.”
She said RBM was responsible for debiting government accounts and crediting commercial banks for the cheques to be honoured.
During cross-examination, Masangwale also admitted having no knowledge of the Integrated Financial Management Information System (Ifmis), the government’s centralised electronic payment system. She said she did not know how it functioned.
The 16th witness also admitted into evidence letters introducing several government accountants as signatories, among them Auzius Kazombo, Fletcher Kaizo, Roosevelt Ndovi, Clemence Madzi and the former Accountant General himself.
She also tendered images of cheques which she cleared as bank teller among them one amounting to K21 million to Makhausi Construction and K244 million to Stadal Building Contractors whose signatories were Ndovi, Kandoje and Madzi.
In her testimony, the 17th witness, Mirriam Samala, who works as counter operations officer at RBM, said during Cashgate there was no cheque list from the government for the central bank to clear and that any cheque which came through was cleared.
After Cashgate, she said, this has been introduced, allowing for verification if the government accounts have sufficient funds before submitting the cheques to the supervisor for clearing
When Andy Kaonga, lawyer for the second accused person, Kandoje, queried how they are able to tell if the cheque is on the list, Samala said this is indicated in the system before they start processing.
The court also learnt that RBM took part in the process of submitting witness statements with defence lawyers implying their testimony could have been tampered with.
The two witnesses from RBM confirmed that the witness statements were submitted to the central bank’s legal department as a standard practice but insisted the ‘meaning’ was not changed just the words.
