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Government duped with fake cheques

Msowoya: we have introduced more stringent measures
Msowoya: we have introduced more stringent measures

As the country is reeling from Cashgate, which has almost rendered government bankrupt, some unscrupulous Capital Hill staff have been swindling public revenue using fake cheques printed outside the normal system, Weekend Nation has established.

The trick, according to Capital Hill sources, was invented immediately after Treasury stopped processing payments using the Integrated Financial Management Information System (Ifmis) after loopholes were discovered in the system through which billions of kwacha had been stolen.

One of the sources revealed that the Department of Accountant General was shocked to learn, last year, that some government cheques were returned by commercial banks because they had already been cashed.

Said the source:  “There was a time a cheque amounting to K6 million was issued and by the time it was taken to the Malawi Savings Bank for encashment, it was discovered that somebody had already cashed a similar cheque. The cheque had the same amount, same signatories, number and everything was similar to the original cheque.”

The source said it was then discovered that some officers were printing government cheques outside the normal process and would rush to the bank to cash whenever a payment has been issued.

Confirmed investigations into the case: Manjolo
Confirmed investigations into the case: Manjolo

“This was inside work. They would know what payments had been made and would use the same information on these fake cheques and rush to the bank.

“The fake cheques look real, so it was difficult for the bank to reject them, and the signatories, knowing that they had issued that cheque, would authorise encashment.

“The officers took advantage of the suspension of the Ifmis because the payments were done manually, so it was easy for them.

“So, a lot of money was also stolen even after Cashgate was discovered and investigations are underway at the moment,” added the source.

Ministry of Finance spokesperson Nations Msowoya said the issue of fake or stolen cheques is being handled by police, describing the loss through such fake transactions as minimal.

Said Msowoya: “In the past, we have had cases of fake cheques. Most of these cheques were discovered when they were being presented to the banks for encashment [or] to be deposited or [to be used to] get goods from suppliers.

“Since September 2013, we have introduced more stringent measures at the Accountant General Department with regard to management and custody of all cheques. We are also working with all commercial banks and the Reserve Bank on this matter.”

Msowoya said in the case of the K6 million, government did not suffer any loss because when the cheque was presented to the Reserve Bank, it was not honoured as it was not on the list of government cheques.

“The commercial bank that honoured the cheque may have shouldered the loss,” he said.

Asked how much has been lost through fake cheques, Msowoya said: “I don’t have an estimate on the amount that has been lost, but it is minimal. Of course, most of the people who are defrauded are suppliers of goods. All cases of stolen/fake cheques have been reported to police for investigations and prosecution.”

National Police public relations officer Rhoda Manjolo on Thursday confirmed that law enforcers were investigating the cases and that nobody had been arrested on suspicion that they were printing fake government cheques.  She could not say how many such cases police are dealing with.

Anti-Corruption Bureau senior public relations officer Egrita Ndala said, when Weekend Nation inquired if the bureau is investigating similar cases, that the anti-graft body has not segmented the investigations to such specific cases.

“The investigations into Cashgate include establishing the authenticity of various payments through government paying systems,” said Ndala.  “At this point we are not in a position to give out specifics of our work for fear of prejudicing investigations.”

Reserve Bank of Malawi spokesperson Mbane Ngwira said in the week the Accountant General was best placed to shed light on the matter since government cheques originate from his department.

Said Ngwira: “That’s where the cheques are printed and that’s where controls are required. They should also be knowledgeable if any money was lost and whether the culprits have been identified [or not].”

Government is currently failing to adequately fund its departments.

Some senior civil servants last week said if government was a private entity, it could have been declared bankrupt because normal operations have almost come to a halt due to lack of financial resources, a situation Treasury described as a result of Cashgate and resultant withdrawal  of aid by donors.

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One Comment

  1. With no political will on cash gate then this can not stop. The culprits in the cash gate are still there after only been transferred to different departments or promoted? No body was punished so how do you expect them to stop. Unless they were fools yes they can stop but otherwise no.

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