Former ruling Democratic Progressive Party (DPP), now in opposition, presided over the loss or mismanagement of over K90 billion through the Integrated Financial Management and Information System (Ifmis) abuse between 2009 and 2012, The Nation has learnt.
This is according to an interim investigative audit report of the Ifmis that the National Audit Office (NAO) carried out between November 2011 and the first half of 2012, but was kept under wraps.
The interim report also details how the money was allegedly lost or mismanaged through seven irregularities involving specific financial transactions.
The seven irregularities are: (1) payments that NAO suspects were done “deliberately”—not for emergency reasons or technical faults as some officers claimed—outside Ifmis; (2) those without vouchers; (3) those not supported with liquidation documents; (4) payments made to banks without details of beneficiaries; (5) payments for purchases without Internal Procurement Committee (IPC) authority; (6) payments to suppliers for goods without evidence of delivery and; (7) payments for fuel without evidence of delivery.
The Ministry of Finance—through then budget director Dr Dalitso Kabambe—commissioned the audit after suspecting fraud in the central payment system (Ifmis), according to the background note in the report.
The probe coincided with the discovery in late 2011 of K400 million (US$1, 081 081) in a bank account belonging to a civil servant working for the Accountant General’s Department (AGD).
However, the DPP administration systematically discontinued the exercise before 14 more government departments/ministries were probed, suggesting that the plundered K90 billion—more than double the allocations to the Ministry of Health—could be small change compared to what may be the loss if the agencies that escaped the probe were factored in. This year’s budget for health is K42.4 billion.
The 14 departments/ministries were the Office of the President and Cabinet (OPC); Ministry of Finance (Treasury and Accountant General)—both of which are currently competing for the highest number of cash-gate villains in recent weeks—the Office of the Vice-President, Ministry of Information; Ministry of Defence; Malawi Defence Force; Ministry of Home Affairs; Ministry of Transport and Public Works; Ministry of Energy and Natural Resources; Ministry of Justice; National Assembly; Department of Human Resource Management and Development; Ministry of Foreign Affairs, and the National Local Government Finance Committee (NLGFC), according to the report.
At OPC, the audit team failed to carry out the audit because they were “turned back” whereas at the Ministry of Finance (Treasury and Accountant General), the investigation was not done because it was “planned to be the last to be audited”, according to the report dated October 12 2012, which NAO validated yesterday.
The remaining 12 ministries/departments were not audited due to “logistical problems”, the report says.
But ‘logistical problems’, according to reliable sources, are coded language for lack of funding motivated by a deficit of political will during the Bingu wa Mutharika era to continue with the damning audit.
In addition, the sources say, the leadership at the time—after realising that the audit trail could taint them—silently put out word throughout the government system that the exercise be frozen.
It may not be long, however, before the nation wakes up to the biggest ‘Capital Hill job’ ever done when the ongoing investigations, including government-wide forensic audits of all ministries/departments that President Joyce Banda ordered last month on the back of the cash-gate, are concluded.
The President has assembled a team of local and international experts to comb through the payment system dating back to 2006 and provide a clearer picture of the extent to which a suspected cabal of greedy civil servants and their private sector accomplices have bled into a comma Malawian taxpayers, half of whom cannot afford three meals a day.
Roughly, 50 percent of Malawians survive on less than $1 (K400 per day) and struggle to access the most basic of services such as clean water, health-care, food and decent housing.
How the money was stolen
Of the seven irregular payments, it is the issuance of cheques without vouchers that deprived taxpayers the most, with K57 billion allegedly pilfered through this.
The second source of drain involved payments outside the Central Payment System (CPS) otherwise known as Ifmis, through which, around K12.6 billion was lost or misused.
About K3.6 billion was also either lost or mismanaged through payments to individuals on behalf of other people without the acquitted signature list of the payees, says the report.
It also reveals that around K2.9 billion was lost or mismanaged, especially at MPS, through payments to banks without details of beneficiaries and the purpose of the payment.
NAO corporate communications officer Thomas Chafunya confirmed that the supreme auditing body carried out the audit, but declined to offer details, citing client confidentiality.
Treasury spokesperson Nations Msowoya said in an interview yesterday that he needed more time to check the information.
On the other hand, commentator Unandi Banda said in an interview yesterday that DPP has lost the moral high ground to level what he called undue criticism on Banda and her People’s Party (PP) administration that has taken bold steps to deal with unfettered plunder that spilled over from DPP, the former ruling party that did nothing to stop the pilferage.