Audit exposes K118m CDF rot

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Nearly two years after revelations concerning some legislators abusing Constituency Development Fund (CDF), a recent National Audit Office (NAO) audit has established that the members of Parliament (MPs) abused K118 million.

Titled Report on Accounts of Local Councils for the year ended June 30 2017, the audit shows that the funds were largely abused through payments for projects that did not exist.

The Auditor General says in the report MPs were major culprits as they are said to have identified projects and facilitated payments without following CDF guidelines.

In the 2016/17 financial year, Parliament approved K18 million for CDF translating to K3.4 billion for the 193 legislators.

The report vindicates sentiments made by Minister of Finance, Economic Planning and Development Goodall Gondwe in Parliament in June 2017 that there was “gross mismanagement of the CDF and District Development Fund [DDF]” which a preliminary report found that about K80 million could not be accounted for CDF in 16 districts in 2016/17.

But legislators randomly interviewed have dismissed the allegation and pushed the blame on the councils for allegedly excluding them in the process of disbursing funds to suppliers.

The report, which covered all the country’s 35 local government councils, shows that there were a lot of payments for works not done or non-existent in CDF. The Auditor General has since recommended that local councils should ensure proper coordination in handling CDF projects with MPs who appear to have all the powers.

The Auditor General also found that some district commissioners (DCs) were not monitoring CDF projects as required in the guidelines.

The audit shows that Zomba district and city councils, Dowa, Dedza, Machinga, M’mbelwa and Rumphi district councils top the list of councils with CDF projects which received money for projects that could not be traced.

In Dowa, CDF materials estimated at K22 million were purchased, on paper, but the auditors found no evidence of their being delivered to the project sites.

In Dedza, the report notes that most projects were identified by MPs without involving other stakeholders.

Reads the report in part: “A visit to the project sites and through interviews with the chiefs, councillors and ADC [area development committee] members revealed that projects worth K8.3 million were identified by MPs themselves without the involvement of stakeholders in the CDF guidelines.

“It was observed that contracts for CDF projects worth K5.1 million were awarded by MPs without the involvement of  IPC [internal procurement committee] and K4.7 million was paid to projects where there were not only incomplete projects, but not existent.”

In Zomba district and city councils, a whopping K70 million is also reported to have been paid for non-existent projects.

In Machinga, the auditors failed to trace existence of K16 million CDF projects in Machinga Central Constituency, K481 508 in Machinga North East and K3.3 million in Machinga Likwenu.

In Mangochi, the council bought two minibus ambulances using CDF when, according to audit findings, the vehicles were not a priority as per CDF guidelines.

It was also established that about K92 million in CDF payments were not processed in the Integrated Financial Management and Information System (Ifmis), government’s electronic payment system, contrary to Treasury instruction number 5.9b.

At M’mbelwa District Council, K8.1 million was paid to purchase materials for projects but the auditors found that the purported projects could not be traced.

In Rumphi, payment vouchers and other related documents revealed that there was expenditure for CDF projects which could not be traced.

Some districts such as Chiradzulu are reported to have paid K46 million to a CDF project which was not completed while in Chikwawa about K4.7 million of DDF covered up CDF but is yet to be refunded.

Dowa is reported to have purchased materials totalling to K22.5 million which were not delivered and information indicated that MPs took the cheques and directly dealt with suppliers, flouting the whole CDF process.

Meanwhile, Parliamentary Public Accounts Committee (PAC) chairperson Alekeni Menyani has called for the review of CDF guidelines while advising MPs on the need to follow procedures.

“The local councils also need to beef up professional staff to avoid such scenarios where MPs take charge. At the same time, let the law take its course on those MPs involved in the malpractice,” he said.

A 2015 Tilitonse Fund Report revealed that fraud and accountability queries were on the rise in local government councils amid increased funding from K3 billion to K34.2 billion in a decade courtesy of decentralisation.

Titled Political Economy Analysis of Accountability for Resources and Results in Local Government Councils, the report follows a research conducted by Asiyatu Chiweza, a professor in the Department of Political and Administrative Studies at Chancellor College of the University of Malawi.