Report says Ifmis contract dubious, govt was warned
They say past is prologue and an independent assessment report on Ifmis’ performance done way back in 2009 reinforces this saying in relation to the current Capital Hill cash-gate.
Had government acted on problematic findings of the assessment, Malawians may not have woken up to The Nation’s banner headline yesterday that a Treasury-sanctioned investigative audit of the Central Payment System (CPS), the Integrated Financial Management Information System (Ifmis), done between 2011 and 2012 by the National Audit Office (NAO), revealed that about K90 billion was abused between 2009 and 2012 through the system.
Among major grey areas in the introduction of Ifmis, according to the assessment that the Office of the President and Cabinet (OPC) sanctioned in 2009—was that the Bingu wa Mutharika regime implemented the package in a hurry and did so without a signed service contract with its supplier, Soft-Tech Consultants Limited.
Soft-Tech is a Tanzania-based authorised dealer which supplied Ifmis to the Government of Malawi.
The previous administration, said the assessment, had also rolled out the accounting software without all the programmes it had paid for. The modules left out were critical to the efficiency and security of the transactions, according to the assessment report.
Information we have reviewed also shows that the whole process of engaging Soft-Tech Consultants to implement Epicor, the Ifmis software, did not make business sense as it favoured the contractor (Soft-Tech Consultants) more than government.
It also cost taxpayers $1.7 million (over K680 million at current rates) more than anticipated, according to the assessment report done in 2009, four years after Ifmis was implemented.
The OPC-instituted assessment was carried out by independent consultants, McCarthy Phiri and Richard Chisala Jnr, whose task was to investigate and assess weaknesses in Epicor.
The two found several weaknesses in Ifmis and made recommendations to Mutharika.
But as we found out, nothing was done. This week, we learnt there was a lot of resistance to implement the findings and that feet-dragging spread the cancer and became endemic, which today has seen tens of billions of kwacha lost; enough money to scale up access to free antiretroviral treatment for thousands of people living with HIV and Aids.
A high-level OPC source who was privy to the report confided yesterday that the Soft-Tech Consultants contract “was indeed dubious and was not signed”.
Said the source: “This anomaly [lack of contract] led to huge implications. The government could not take the supplier of the system to task over any issues with the system.
“And it is the same anomaly that resulted into the supplier of the system to provide four functional modules and yet government paid in full for nine modules. And unfortunately, the modules that were not delivered were the most crucial that could have helped in proper tracking of Government resources.”
OPC spokesperson Arthur Chipenda asked for more time to prepare what he called “a comprehensive response after liaising with other concerned Ministries and Departments.”
The OPC-sanctioned assessment report found out that the Ifmis project did not have a legally-binding contract, raising questions about the entire contractual and engagement process, four years after it was implemented and three years before the NAO investigative audit revealed the multi-billion pilferage.
The other damning revelation in the report was that Soft-Tech Consultants did not fulfil their contractual obligations in that the system was partially delivered with only four functional modules of the complete financial suite which government fully paid for.
“Despite government paying for all key modules of the upgraded Epicor 7.2.3 financial suite, the Ministry of Finance, through the Accountant General’s Department [AGD], is currently using only four.
“The system does not have any alert system to detect any fraudulent activities or any deviations to normal operations within the system such as overriding system controls without appropriate approval process and any system performance issues, let alone a functional audit trail to track system usage,” added the report.
The allegations of corruption and embezzlement have become a massive setback for President Joyce Banda, who faces elections next year in May.
Many observers and diplomats in Lilongwe believe President Joyce Banda’s re-election depends on how she responds to the crisis.
So far, she has dropped some Cabinet ministers in an attempt to right perceived wrongs in her administration and has overseen the arrest of several civil servants.
Soft-Tech Consultants did not respond to an e-mailed questionnaire we sent them.
Ephraim,Let me tell you that Joice Banda was informed about these loopholes and she deliberately kept quite quite on MK400 million scan during Bingu’s time up until she utilized the same loophole to siphon her part. Thats why she did not remover Dr Kabambe to champion the siphoning which they indeed did. Here we are, who suffers? People in hospitals are dying due to lack of medicine, if they get medication then its expired. PP and DPP should pay back all the MK110 + billion to MG Ac No.1. Thats the solution and jail all the culprits afterwards. We can jump up and down the bottom line is the money should be paid back immediately and Parliament should authenticate that the money is paid. Deal sealed.
This is nonsense because as it has been pointed out before that the system in question required a person to sit in front of the computer and in-put the evil transactions. If the contract and the process of acquiring the famous Ifmis was questionable why was the banks not able to notice the huge amounts they cashed, were all Malawi banks also using Ifmis as well? Let us not confuse issues here, definitely a crime has been unveiled involving huge sums of public money and indeed some individuals need to be answerable and give a clear account as to how the money mentioned was siphoned. If it was started ten/twenty years ago let whosoever was/has been in office face the music; we don’t care whether it is MCP, UDF, DDP or PP – what we are saying here is that money went missing and it did not just vanish into thin air but somebody stashed it in their bank accounts. It beats me to learn that some miserable thief who owns a company that was not providing anything to government has the audacity to gather courage by threatening that they are going to sue Galaxy Radio Station because they spilled the beans. Apparently, who should be suing who here, the cheats or the whistle-blower? Here you can plainly tell that these clowns are being protected by some person in a high office. Malawi Police Service can you please show that you are working and surely working professionally? What other evidence do you require when the Registrar General has revealed who the owners of that bogus company are? Zomvetsa chisoni ndipo zopangitsa manyazi.
Malawian incompetence has no limits. I always suspected it just wasn’t possible to effectively install a fiancial system in the Govt without glitches. Not knowing that the glitches were swept under the rugs and if you were to see the big bwanas invloved in installing these systems they talka good game at the hotels and golf clubs – either they know nothing or they are extremely corrupt. In my opnion a whole Malawian generation has disappointed us.
I’m sick and tired of tax payers’ money being abused by money-loving, work-hating lazy government players. Not one person checked for a contract? Seriously?
Don’t count on a fully functioning nation any time soon. Like Zuma has clearly indicated, we bring on being the laughing stock of the world, because we are incapable of exherting any kind of effort for anything. So don’t be mad that money was stolen. It’s not like if it wasn’t it would have not been used to pay people who weren’t doing their job in the first place.
Theft has been going on for past many years since democratic regime came in power. It started with small scale and kept on increasing and daring. Ordinary man and donor partners walking on street could see the luxury cars, luxury shopping, luxury houses increasing each year and surprisingly no medicines in hospitals, pot holes getting larger and larger, crime on increase and cost of living going up and up. Government agencies to investigate, catch and punish the robbers either had no capacity or deliberately shielded these thieves. One day it had to explode and to day it has. Open media and our daring journalists has done the job 50% job. Cancer of corruption has to be removed. Meanwhile please Donors switch of the aid until you see the clear path where your money is going.
Report says Ifmis contract dubious, govt was warned |The Nation Online