Lipenga speaks on cashgate

Former Malawi minister of Finance Ken Lipenga has told the Public Accounts Committee (PAC) of Parliament that he was not aware that some civil servants were siphoning billions of public funds from government coffers.

Lipenga, who was left out of President Joyce Banda’s new Cabinet hired in mid-October this year, on Thursday night heeded summons from PAC which is investigating events surrounding the theft of public funds and interviewing officers who were in charge, including the former minister of Finance, the Accountant General and former secretaries to the Treasury.

Lipenga told the committee that a report into the Integrated Financial Management Information System (Ifmis) by Technobrain submitted to his office on July 18 2013 is what alerted him to the plunder taking place in the civil service.

But Lipenga categorically dismissed suggestions from the committee that he was aware of the looting in his ministry.

He said the unauthorised spending such as the K5.2 billion (about $13m) detected in the Ministry of Tourism was done without his knowledge or that of the budget director and secretary to the Treasury.

Said Lipenga: “I was head of the ministry, yes. It’s a fact that what I should take is political responsibility and that’s why I am no longer minister. If I knew we had thieves in the ministry, we would have flushed them out. But since it wasn’t done then, it is being done now.”

He also told the committee that the Reserve Bank of Malawi (RBM) alerted him to the overexpenditure in some ministries and he immediately instituted bank reconciliations which establised that expenditure was contrary to that approved by the budget director.

But when asked why he did not act immediately after the theft was discovered, Lipenga said there was need for a more comprehensive analysis before taking any drastic action.

He said he assigned his then deputy, Dr Cornelius Mwalwanda, to work with RBM to find out why the central bank said ministries were overspending yet there was no such indication within the ministries.

The Technobrain report found that Ifmis could not capture grant finance, it did not capture data on time and coupled with failure to carry out routine bank reconciliations and sharing of passwords, some civil servants managed to circumvent the system to siphon government funds.

“After meeting Technobrain, I had all the information I needed to get rid of Ifmis. It was a tragedy that after eight years, the system was not working. It was my view then that it should be replaced,” he said.

Currently, an international firm engaged through the British government alongside the National Audit Office has started working on a forensic audit which is expected to be ready by January next year.

Revelations of plunder of public funds came into the limelight after the shooting on September 13 2013 of Ministry of Finance budget director Paul Mphwiyo.

Several people, including civil servants and businesspersons, have been arrested in connection with what has come to be known as the Capital Hill cashgate.