US probes four ngos

Washington wants four non-governmental organisations (NGOs) operating in Malawi to explain usage of K878 million (US$273 502) that may have been spent on ineligible activities under a United States (US)-funded food security programme.

A preliminary audit report by the US government’s audit office called Office of the US Inspector General in Pretoria, South Africa—faults Catholic Relief Services (CRS), Africare, Save the Children International, Emmanuel International and Total Landcare—which are partaking in the US-funded Wellness and Agriculture for Life Advancement (Wala) programme—for issuing salaries and allowances that did not reflect staff’s actual activity at various times between 2009 and 2013.

At the same time, the audit report, addressed to USaid Malawi mission director Douglass Arbuckle, doubts that US relief food worth $15 590 (about K5.46 million) targeting 846 beneficiaries reached the targeted beneficiaries early this year.

Food shortages are expected to hit Malawi once again this year, with 1.5 million people projected to face starvation, according to the Malawi Vulnerability Assessment Committee (Mvac).

Last year, Mvac reported that 1.63 million people were food insecure.

Wala is a five-year integrated food security programme designed to improve food security for over 200 000 chronically food insecure households in southern Malawi.

At the National Statistical Office NSO) estimate of an average of five people per household, it means that the programme is benefitting up to one million people. Malawi’s population is estimated at 14 million.

The audit report, dated July 30 2013, recommends that the four implicated NGOs refund the money if they fail to provide further satisfactory justification for the expenditure.

The audit, whose aim was to determine whether USaid’s agricultural programmes in the country achieved their goals of increasing productivity and enhancing food security, observes that some programme implementers incorrectly charged time to their USaid-funded awards, contravening US government regulations that require implementers to charge time based on actual hours worked.

“We recommend that the Office of Food for Peace determine the allowability of $2 445 808 [about K856.03 million] in unsupported questioned costs arising from unsupported compensation and recover from Catholic Relief Services any amounts determined to be unallowable,” reads the audit report.

At Africare, the audit faults salary costs including associated fringe benefits and indirect costs for  staff members who charged time from June 24 2009, through November 30 2012, totalling $1 947 815 (about K681.74 million) against US government requirements.

“Time sheets for eight [Africare] employees showed they consistently charged the same number of hours each day to certain awards,” reads the audit report in part.

Time sheets are pieces of paper used to record the number of hours employees have actually worked and used for payroll purposes, among others.

The audit faults Save the Children International’s salary costs, including associated fringe and indirect costs for four employees totalling $302 963 (about K106 million).

One of the four employees is said to have had her September 2012 time sheet showing that each day she charged 90 percent of her time to Wala and 10 percent to another USaid health programme when she had not worked on the USaid programme since July 2012.

At Emmanuel International and Total Landcare, the audit faults salary costs worth $15 911 (about K5.57 million) and $65 425 (about K22.9 million) respectively.

“We recommend that USaid/Malawi determine the allowability of $65 425 in unsupported questioned costs arising from unsupported compensation and recover from Total Land Care any amounts determined to be unallowable,” reads the report in part.

In some cases, the audit says, overcharging of salary costs on USaid programmes left less funding available to achieve programme objectives.

“These instances of material non-compliance occurred because implementers did not understand and in some cases chose not to follow US government regulations regarding documentation of compensation costs,” says the audit.

On relief food distribution, the audit says internal controls for food aid were weak, thereby increasing the risk of fraud, waste and abuse, and leading to $15 590 (about K5.46 million) of distributed food aid not being adequately documented.

“Without consistently applied internal controls, the risk of theft or misuse of USaid-funded food commodities increased. USaid/Malawi and the Office of Food for Peace cannot be sure that food commodities worth $15 590 reached beneficiaries as intended because of insufficient documentation,” adds the report.

In an e-mailed response on Wednesday, Total Landcare co-founder and managing director Zwide Jere said the audit of USaid-funded projects is still ongoing; hence, he could not comment on its findings.

“The audit is still ongoing with TLC [Total Landcare] having submitted its management letter to USaid as is the generally acceptable procedure,” said Jere.

CRS country representative Debbie Shomberg on Friday said: “The audit is ongoing and evidence is being provided to close the recommendations.”

On the other hand, Save the Children country director Matthew Pickard said: “The audit is currently ongoing and Save the Children is working with Usaid and other partners to close the recommendations”.

US Embassy acting public affairs officer Hether Dresser on Friday also said the audit is ongoing; “therefore, the US mission in Malawi cannot say anything as of now.”

Efforts to get Africare and Emmanuel International comments proved futile as their officials did not pick up their calls during the week.

NGO Board chairperson Emily Banda on Friday said discussions to resolve the queries were underway.

“All the mentioned organisations are cooperating with USaid in ensuring that the worst does not happen,” she said.

She, however, reminded organisations of the need to be transparent and accountable in the way they utilise their funds in accordance to the NGO Act.

“The NGO Board will take up the matter with USaid and also demand a report from the concerned organisations to get first-hand information on exactly what happened and facilitate solutions to the challenges being faced without affecting the beneficiaries,” she said.

The audit focused on three cooperative agreements with total estimated cost of $82.4 million (about K28.84 billion).

The total estimated cost of USaid’s agricultural awards in Malawi that were active as of December 31 2012 was $113.4 million (about K39.69 billion).