Oxfam and Integrity Platform have questioned the Malawi Government’s failure to act on reports of mismanagement of public resources despite the National Audit Office (NAO) reporting on the same.
In their joint report under the title Analysis of Public Audit Reporting in Malawi, which assessed the Auditor General’s report for the year-ended June 30 2016, the two institutions said the inaction undermines accountability and governance.
The report also faults a poor linkage among constitutional bodies mandated to ensure good governance in terms of public finance management, notably NAO, Parliament’s Public Accounts Committee and the Anti-Corruption Bureau (ACB).
The report targeted three crucial ministries of Agriculture, Irrigation and Water Development; Education, Science and Technology; and, Health in view of critical governance issues relating to effectiveness and efficiency of existing oversight structures.
The three ministries, according to the report, had wasteful expenditures and high levels of non-compliance with the Public Finance Management Act.
The Auditor General’s report highlighted that during the 2015/16 financial year alone, the three ministries drained the public purse of about K1.1 billion which could not be reconciliated.
Further, the report said the Auditor General has been instrumental in exposing some maladministration and abuse of public funds by government ministries, departments and agencies (MDAs).
However, according to the report, delays in processing of the reports by other oversight structures has meant that follow-up investigations are not undertaken timely thereby compromising the effectiveness of the audit report. This, according to the analysis, entails that there is a strong risk that the government audit function is not achieving its intended purpose and mandate of safeguarding public resources.
Reads the report in part: “As much as the Auditor’s General office and structures of his work is constitutional, the Public Audit Act does not provide strong mechanism to action the Auditor General’s report, especially the referral process of the matters raised by the Auditor General.
“The Public Accounts Committee [PAC] of Parliament has legal mandate over the Auditor General’s findings, but doesn’t have enough capacity to take action on specific matters without the involvement of other statutory institutions like the ACB.
On Parliament’s PAC, the Oxfam and Integrity Platform report suggests that the membership should be recruited based on competency and proven record to understand matters of public finance management and audit to effectively execute the oversight function.
The report also recommends granting of prosecution powers to PAC, a suggestion current PAC chairperson Alekeni Menyani does not agree with.
In an interview, he said: “Capacity of the committee is unquestionable in my view, but rather the need to follow up on resolutions made. The committee uses the Auditor General as its back-up technical team; thus, the question of competence falls out, but rather the coordinating aspect.
“Parliament is there to make laws not to start expecting implementation of the same. It would be easy to abuse such a process.”
But Menyani agrees with the report’s findings on lack of action on suspected mismanagement of public resources based on the auditors’ report, saying other law enforcing government agencies “usually develop cold feet on the way”.
Responding to The Nation questionnaire on the report, Oxfam Malawi country director John Makina said there is need to revise the Public Audit Act to provide more independence and power to the Auditor General’s office to follow up on the implementation of his recommendations.
He also observed that under the current Act, the Auditor General’s work stops at issuing the report to PAC. He said this defeats the purpose of improving accountability in public finance management.
Said Makina: “As CSOs [civil society organisations], we are already worried about the lack of vigour in the fight against corruption, theft and abuse of public resources.
“As CSOs, we recommend that there is a register of audit recommendations that monitors implementation and ensures that appropriate action takes place within a reasonable timeframe; actively monitor implementation activity, through to completion and a strong referral system is needed for ACB to act until the culprits are brought to book. Sanctions against the public officers at fault is the only way we can clean the system.”
He also expressed concern with a backlog of audit reports yet to be presented to Parliament, saying such delays defeat the essence of what the audits are supposed to achieve.
Said Makina: “We want to see more political commitment by the Legislature and the Executive in seeing these processes concluded. Otherwise, the backlogs are defeating the very essence of what the audits are supposed to achieve such as transparency and accountability on allocation, utilisation of public resources and development results.”
But Ministry of Finance, Economic Planning and Development spokesperson Davis Sado, in an interview, disputed suggestions that there is lack of action on cases of mismanagement of resources or suspected fraud.
He said Capital Hill has systems and mechanisms to check wrong-doing.
Said Sado: “To that effect, the ministry has operated to its optimum efficiency as a government ministry to ensure that there is prudence in the use of public finances by a government ministries, departments and agencies.
“The working interaction with constitutional bodies such as the ACB is there and that is why there are cases in the courts of law which the ACB or other law enforcement bodies are prosecuting. As to how the various cases are progressing, that is beyond the ministry.”
He added that the ministry is aware of gaps in public finance management and is currently reviewing the Public Finance Management Act to ensure that that some operational gaps are attended to and also to respond to emerging issues.
In recent years, Malawi’s public finance management systems have come under scrutiny, especially in the wake of revelations of Cashgate—the plunder of resources at Capital Hill exposed in September 2013—which led to development partners withdrawing their estimated 40 percent contribution to the recurrent budget. The donors also rechanneled development budget, estimated at 85 percent, to international non-governmental organisations following concerns of poor public finance management which one diplomat likened to “a leaking bucket”.
Besides, the corruption fight has been poor if ratings by international corruption watchdogs such as Transparency International are anything to go by. n