Britain has told the Electoral Commission (EC) head Willie Kalonga to pay back over K5 million (about $12 500) alleged to have been mismanaged on his watch while working at a body London funded.
But Kalonga—who, as chief elections officer will manage the May 2014 tripartite elections budgeted tentatively at K12 billion (about $30 million)—told Britain’s Department for International Development (DfID) that he has nothing to do with the so-called mismanaged money at the Body of Case Handling Institutions (BCHI) where he was executive secretary before moving on to the commission last year.
“I don’t understand why I am being held personally responsible for this when I had a steering committee that was approving every decision and DfID knows fully well that they never funded us on time,” said Kalonga on Friday.
BCHI was a project under the Ministry of Justice, which was abandoned last year amid accusations of mismanagement, effectively stopping a five-year extension of the project.
Documents we have seen and interviews with head of DfID in Malawi Sarah Sanyahumbi indicate that after BCHI, a governance institution, ceased operations at the end of its implementation period last year, the United Kingdom aid agency immediately instituted an audit on their funding covering the period between December 2010 and January 2012.
Deloitte carried out the audit.
The audit found that the institution spent money on unbudgeted activities and overspent on some budget lines.
It also found that some supporting documents were missing and that there were inadequate controls of staff advances.
The audit also found that BCHI did not comply with the Taxation Act provision regarding Pay As You Earn taxes, and there was non-compliance with Withholding Tax rules as well.
The findings prompted Sanyahumbi to write Kalonga on August 2 2012, asking him to pay back K2.6 million and remit K3.1 million in unpaid taxes to Malawi Revenue Authority (MRA).
“As BCHI has ceased its operations and, therefore, DfID is unable to discuss with them the recovery of the identified mismanaged funds, we are contacting you directly as the responsible person at BCHI during the period in question,” Sanyahumbi said in the letter copied to then chief secretary to government Bright Msaka, Ministry of Justice and MRA.
“The UK government takes very seriously any financial mismanagement at partner organisations and reserves the right to seek the return of the funds not used for the purposes stated in agreements with partners,” she wrote.
DfID are also demanding the return of two assets in form of a desktop computer and printer, which they say have not been handed over as per the grant agreement.
In response, Kalonga distanced himself from any mismanagement of funds, saying that the day-to-day undertakings of BCHI were being handled by a steering committee. He said DfID should direct issues of his employment to BCHI who, he said, were his employers.
He blamed the steering committee for the salary advances that were made, saying they did approve all of them, but he accepted that BCHI failed to remit taxes to MRA.
“As advised several times, BCHI failed to remit taxes to MRA arising from the fact that DfID did not provide funding for three months during the financial year,” he said in a letter to DfID dated August 2 2012.
“Efforts to have DfID provide funding for the period they did not fund proved futile; hence, the non-remittance of taxes to MRA,” he added.
He, however, acknowledged that some supporting documents on payments were missing. “We strongly believe that the documents are available, but were misplaced.”
But the DfID boss insisted that Kalonga was the signatory of the agreement with DfID “and as such, responsible for the management of the finances granted…it is for this reason we are writing to you and why we hold you personally responsible for any funding mismanaged.”
Sanyahumbi also told Kalonga that the delay in funding and the fact that only three disbursements were made rather than the intended four were due to the failure by BCHI to use all the money they requested for in the first quarter.
“At no time did BCHI report to DfID that this delay was preventing them from remitting taxes, which is not surprising considering you had requested and received money in the BCHI account for these purposes,” Sanyahumbi said in response to Kalonga’s answers.
It has been five months since DfID demanded that Kalonga pays back the money and so far, nothing has happened.
Asked in an interview what steps DfID will take to ensure Kalonga’s compliance, Sanyahumbi said she remained hopeful that the issue will be resolved.
“This is mismanagement rather than provable fraud, so I don’t think we will report Mr. Kalonga to ACB or police, though we did consider that option,” she said.
Britain is one of the major development partners that will meet 50 percent of the elections budget whereas the Malawi Government, according to Treasury spokesperson Nations Msowoya, will cough the other half of an approved budget.