DPP K92BN cashgate under investigation

Those who might have stolen public money during the first Cashgate under DPP administration should now start getting worried as the Germany government has funded a comprehensive forensic audit of ministries and departments covering the period between 2009 and 2012.

An interim investigative audit report of the government payment system known as Integrated Financial Management and information System (Ifmis) that the National Audit Office carried out between November 2011 and first half of 2012, which was kept under wraps, showed that government lost over K90 billion through abuse and irregularities.

The opposition parties and civil society have been calling on the Democratic Progressive Party (DPP) administration to act on this report and punish those responsible apart from acting on the K20 billion loss incurred between April 1 and 30 September 2013 under the People’s Party (PP)administration.

But Minister of Finance spokesperson Nations Msowoya told Weekend Nation this week that a comprehensive auditing exercise will take place covering the period under the first DPP administration.

“It is true Germany government has pumped money to the Auditors General’s office for a comprehensive forensic auditing across government ministries and departments starting from the year 2009 to 2012,” said Msowoya.

According to Msowoya, Price waterhouse Coopers (PwC) International has been named as the audit firm to carry out the exercise.

When asked why not Baker Tilly, a British auditing firm that has just finalised the Cashgate audit at Capital Hill under the PP administration, Msowoya said the Auditor General’s office is responsible for the hiring of auditors.

“Price waterhouse Coopers has an international reputation and that they are able to help in data collection as well as in reporting,” he said

Head of development cooperation at the Germany Embass Katrin Pfeiffer said in an email response her government had provided support to this audit as one of many components under its technical cooperation project Strengthening Public Financial and Economic Management in Malawi, implemented by GIZ.

Pfeiffer said Germany has funded the audit to the tune of EUR18 240 000.00 (K 9.76 billion)

She explained that the forensic audit carried out by Baker Tilly with funding from the British Department for International Development( DfID) covered only the six-month period from April to September 2013 and was limited to selected ministries and departments which had been identified as targets in recent cash misappropriations dubbed as Cashgate.

She pointed out that there is a suspicion that misappropriations of government money took place not only in six months prior to the discovery of the Cashgate scandal but over a longer period of time dating as back as 2009.

“The German-funded audit will build on experiences and findings of the British-funded audit,” Pfeiffer said.

She added:  “The audit is to quantify the amount misappropriated over the period 2009 – 2013. It will be submitted to the Auditor General in order to be used by the Malawi authorities (Executive, Legislative and Judicative) and other interested parties to determine suitable actions to remedy the situation caused by the presumed misappropriations.”

National Audit Office (NAO) corporate communications officer Thomas Chafunya explained that this is going to be a different phase of the forensic audit funded by a different donor.

“One important issue to consider is that forensic auditors work using similar methods though there could be slight differences in approach, but those are not material. However, the results always come in the same manner,” said Chafunya.

He expressed optimism that the exercise is going to have the support of government, saying President Peter Mutharika has made it clear that the office  of the Auditor General will work free from any interference or obstruction in line with Section 184 sub-Section 7 and 8 of the Constitution.

He said “in that way we believe the spirit that was there during the previous forensic audit will continue”.