Business as usual on public finance management?
In the run up to the court-sanctioned fresh presidential election held on June 23 2020, President Lazarus Chakwera and his Tonse Alliance partners passionately campaigned on a platform of doing “business unusual” to restore “broken systems” that reduced the public finance management system to a “leaking bucket”.
Every year, audits from the National Audit Office (NAO) pointed to wastefulness, abuse of funds, lack of supporting documentation and general lack of accountability by Malawi Government ministries, departments and agencies (MDAs).
The system was simply not working. In fact, in the wake of the revelations of Cashgate, the plunder of resources at Capital Hill through dubious payments by both public officers and private businesses alike exposed in September 2013, one of the foreign diplomats described Malawi’s public finance management system as “a leaking bucket” where they could no longer put their resources into.
It was little wonder that Malawians yearned for change and saw hope in the ticket of Chakwera and Saulos Chilima as Vice-President.
But a NAO audit for the financial year ending June 30 2020, the Tonse Alliance’s first year in office, presented in Parliament has shown that MDAs collectively failed to account for K96.8 billion. There is also about K800 million in Constituency Development Fund not accounted for while local government councils are also in a mess in terms of public finance management.
It may be argued that the Tonse Alliance was still settling down during the first year, but then that would be a lame excuse as the leadership, during the campaign, had promised to hit the ground running upon being entrusted with power.
What is disheartening, as Public Accounts Committee (PAC) of Parliament chairperson Mark Botomani earlier submitted in his reaction to the audit, is that recommendations by the oversight committee on sealing loopholes seem to fall on deaf ears. It is business as usual if the findings are anything to go by.
Internal auditing puts in place controls in organisations and to ensure that systems are working whereas external auditors or auditing involve testing of the systems set by internal auditors.
In general, audits examine adherence to set systems and standards in terms of procurement, supply and payments.
Malawi has some of the best pieces of legislation governing public finance management, but the concern has remained lack of concrete action to implement recommendations of the auditors to seal the loopholes. It is this laxity that is derailing the battle against fraud and corruption, vices estimated to drain about 30 percent of the resources Parliament allocates in the annual national budget.
The fight against fraud and corruption will be won the day authorities will move to implement recommendations by auditors as well as oversight committees such as PAC. But this will not be achieved through podium rhetoric.
The Public Finance Management Act which provides that controlling officers under whose watch public funds are mismanaged should be disciplined, but since the law was enacted in 2003, year-in and year-out, we read reports about over-expenditure or abuse of office yet no one has been punished.
My passionate prayer is that the NAO audits of the Malawi Government accounts for the years 2021/22 and 2022/23 will be more refreshing with leakages sealed. This should be possible with the new version of the Integrated Financial Management and Information System, the government’s electronic payments platform, rolled out.
Surely, there will be no excuse for the current administration if the audits for its second and third fiscal years in charge will not reflect changes on the highlighted shortfalls. For the record, the auditors’ recommendations and concerns have always been the same for the past decade, what has lacked is the political-will to implement the changes.
