Malawi Government has interdicted two accounts officers involved in the pension syndicate whose story Weekend Nation broke early last month.
Capital Hill has also begun reforming the public sector accounting system in the wake of loopholes that have allowed civil servants to swindle the taxpayer out of millions of kwacha.
Treasury confirmed this week that the reforms were ignited by the case in which officers at the Accountant General’s office paid K11 722 611.57 (about $30 005) to one Julius Kadantele as civil service pension.
Government records later revealed that Kadantele has never existed in the public service although his payment voucher claimed that he worked in the military.
Two officers have since been interdicted for their involvement in the matter which raised fears of government losing billions of kwacha if left unchecked.
“Yes, two have been interdicted and the matter has been reported to police,” confirmed Treasury spokesperson Nations Msowoya.
According to official letters we have seen, the officers are Olipa Mulivi, who worked as senior accounts assistant in Grade L, and George Kukacha, an accounts assistant in Grade M.
In the letters, dated February 5 2013, chief human resource officer at Accountant General’s office, Joseph Asefa, described the alleged actions of the two as fraudulent.
“I have received a report from your division head that you were involved in a fraudulent payment amounting to K11 722 611.57 payable to a Mr. Julius Kadantele.
“I am, therefore, interdicting you from exercising the powers and functions of your post as [an accounts assistant for Kukacha and senior accounts assistant for Mulivi],” reads the letters in part.
The interdictions are effective February 1 2013.
“During the period of your interdiction, you shall not leave the country without my written permission. This order shall remain in force until the court of law has finalised your case,” conclude the letters.
According to the Office of the President and Cabinet (OPC), it is suspected that a syndicate exists in the public service—from ministries where ghost civil servants are created, to the Auditor General’s Office where payments are confirmed, up to the Account General’s office where payments are made.
These officers open accounts with various banks using fake names where the money is deposited before they share it.
In the Kadantele case, the unknown person opened what they call a ‘Fast Account” number 5590260444 with FMB Area 2 branch on October 29 2012 with an initial deposit of K5 000.
Apart from several other deposits, Kadantele deposited a government cheque number 347534 worth K11 722 611.57 on January 21 2013, raising suspicions because the fast account is essentially for small deposits.
OPC immediately froze the account and, according to our sources, the money was still untouched as of Wednesday March 6 2013.
“Eventually, that money will be sent back into the Account Number 1 at the Reserve Bank,” said Msowoya.
While only two officers have been interdicted so far, documents showed that three people were involved in the preparation, authorisation and approval of the payment voucher number 030PV0033838.
The cheque was also signed by senior officers in the pensions department at the Accountant General.
On Thursday, deputy National Police spokesperson Kelvin Maigwa confirmed that the matter has been reported to fiscal police “but no arrests have been made so far.”
Surprisingly, the two interdicted officers are not on the list of suspects at police headquarters.
“So far, we only have one suspect on the file, Julius Kadantele, who is being charged with two counts; fraud and false accounting and attempting to obtain money by false pretence,” said Maigwa.
Meanwhile, the Kadantele case was a sufficient whistle blower to push government into action, according to Msowoya.
“Following that incident, we are reviewing all business processes in government accounting system,” he said.
According to Treasury, the review would, among other things, ensure more segregation of duties to enhance transparency and accountability.
“When a voucher is prepared, it must be cross-checked by a number of officers. The reforms will see several people knowing about a particular transaction and we also expect better collaboration with banks,” he said.
The development comes amid fears that the government’s computerised accounting system, Integrated Financial Management Information System (IFMIS), is a porous border through which some civil servants are stealing public money.
Government abolished the manual system of authorising payments, including funding to ministries, loans, gratuities and pensions after rolling out IFMIS.