Former loans board linked to K300m fraud

Higher Education Students Loans and Grants Board suspects that staff and senior management team from the previous board schemed to embezzle K300 million at the institution.

An investigative audit conducted by the internal audit department at the board, linked the fraud to a private university in Lilongwe, Africa University of Guidance and Counselling, which closed doors also due to finance-related issues, according to the audit report.

Speaking at a press briefing in Lilongwe yesterday, board director of Higher Education Students Loans and Grants Board director Henry Chingaipe said documents suggest that the previous board was not involved in the approvals but that it looks like very much a scheme at the level of management.

He said: “The information we have is that it’s revolving around staff at that time that were in senior management. It was also mentioned that some payments were made to entities related to people who were in management at that time.”

For instance, the board director pointed out that finance management records show who prepared the vouchers and who made the approvals as well as who authorised payment and who did the payment on the electronic transfer platform.

Attorney General (AG) Thabo Chakaka-Nyirenda said in an earlier interview that he had instructed the Director of Public Prosecutions (DPP) to look into the matter as he suspected money laundering and fraud after the release of the audit report dated April 1 2022.

DPP Steven Kayuni confirmed in a separate interview that his office was attending to the matter which he described as unfortunate.

The audit report discloses that there was a sharp increase in the number of students’ beneficiaries and loan amounts over three academic years 2015/16, 2016/17 and 2018/19 for Africa University of Guidance and Counselling.

The report discloses that some loose minute at the Loans Board showed that tuition fees for some students at the university were signed by two employees and authorised by the former executive director the late Chris Chisoni.

“On 8th April 2019, the finance department processed a batch number 99651 to pay K300 million to Africa University’s bank account number 1001687502, held at the National Bank of Malawi, Capital City Branch,” reads the audit report.

The transaction was successfully processed by the bank, the report says.

It discloses that two former employees at Africa University of Guidance and Counselling visited the Loans Board offices on March 8 2022 where an impromptu meeting was held.

The meeting originated from the phone enquiries the board’s internal audit manager made to the two officials regarding the K300 million payment.

They further explained that the university was asked to refund the money immediately the funds transfer reflected in the university’s bank account because the board had made an error by paying K300 million instead of K10 million which the university required to clear its rental arrears,” reads the report.

The internal auditors further said in the report that their examination of documents and inquiries noted that the 176 students who were presented as having benefited from the K300 million loan disbursement did not complete any loan application and bonding forms.

“It was further noted that the university and the students’ beneficiaries were not included on the 2018/19 press release for the provisionally approved loan list.”

The report reveals that out of the 176 students mentioned, 14, who were allocated a total loan of over K23 million, were pursuing master of arts in guidance and counselling, yet the board’s Act mandates the board to disburse loans only to students pursuing higher education at the level of degree or higher diploma at an accredited university or college.

And yet, Africa University of Guidance and Counselling was not accredited by the National Council of Higher Education.