Malawi President Joyce Banda raised the alarm about the plundering of government resources five months ago and summoned Minister of Finance Ken Lipenga and other officials to a meeting to devise mechanisms to seal the loopholes, Nation on Sunday can reveal.
We have also established that when Stephenson Kamphasa took over as Auditor General in July 2013 he recommended immediate suspension of the porous Integrated Financial Management Information System (IFMIS) payment platform that fraudsters used to siphon government money.
Nation on Sunday
has it on good authority that apart from Lipenga, some of the people who attended the meeting convened by the President were Deputy Auditor General Rex Chiluzi, former Treasury budget director Dalitso Kabambe, former Accountant General Dorothy Banda and some officials from the Office of President and Cabinet (OPC).
At the meeting, the President reportedly expressed concern about the looting of government resources, according to Nation on Sunday sources.
Said an insider this week: “She asked these people to form a committee and clamp down on these malpractices. It was chaired by OPC. The initial ToR [terms of reference] was to stop the pilferage. When the new Auditor General came in, he took over everything.
“The Auditor General, in one of the recommendations, said IFMIS must be abandoned so that experts can come and upgrade it to new versions. We are about five versions behind.
“In the course of trying to abandon IFMIS, prior to the shooting of Paul Mphwiyo, the President had asked the Auditor General to meet her but met him on Monday after Paul was shot. The Auditor General set up a team of auditors from NAO [National Audit Office] to interrogate the system. It was very evident that the system was very porous.”
Suspension of IFMIS
Although the Auditor General recommended immediate suspension of IFMIS to stop the fraud, government switched off the payment platform in late September.
“One of the recommendations the Auditor General made was that there has to be an international expert in forensic auditing to audit the system while it is off line since no one can come in and get out. This decision was made long time ago.
“[Then] last week, the Auditor General met the British High Commissioner and the Norwegian Ambassador separately,” said the source.
The source said warnings about the loopholes in IFMIS were first raised in 2011 when an officer in the Accountant General’s Office was found with K404 million (about $1.01m) in a personal account.
Since then, several meetings between the office of the Auditor General and other government officials have been held.
NAO spokesperson Thomas Chafunya confirmed that there have been several meetings between the Auditor General and other government officials on the pilferage of government resources before the Mphwiyo shooting set off a chain of events that have intrigued and outraged Malawians.
But Chafunya refused to divulge more information on the meetings.
“Yes, the Auditor General has been meeting high profile people before and after the shooting and its ramifications. Most people will note that this has been going on for several years.
“Our own plea is that people should have confidence that everything is being done to safeguard public funds and the economy. But we cannot divulge more,” he said.
Weak accounting, reporting
Ministry of Finance spokesperson Nations Msowoya said he was not aware of the meeting the President convened with Lipenga and other officials to discuss the looting.
“In any case, it is not strange for Her Excellency to have a meeting with the Minister of Finance and officials from the Treasury and the Accountant General’s office to discuss economic and public finance management issues. I am not aware of any recommendation to suspend IFMIS,” said Msowoya.
He defended IFMIS, arguing that since its introduction in 2005, there have been notable improvements in the accounting and reporting of public money.
He also dismissed suggestions that IFMIS was five years behind in terms of versions.
“What is important for any system is its functionality. Since we started the IFMIS project, we started connecting central government ministries. Thereafter, we moved to district councils. We could not think of acquiring higher versions of the software before we had fully rolled out the system to all central and local government offices.
“As we speak, with the support of our development partners, we are implanting a Financial Oversight Improvement Project that will take care of the newer versions,” he said.
Meanwhile, the Anti-Corruption Bureau on Friday arrested an assistant accountant in OPC, Frank Mwanza, on suspicion that he made fraudulent payments amounting to about K1 billion.
ACB spokesperson Egritta Ndala claimed Mwanza made the payments to a company [name withheld] although government had no contract with the firm.
According to Ndala, ACB officers found K1.3 million at Mwanza’s house in Lilongwe.
“It also established that Frank Mwanza tampered with information about the three transactions in the Integrated Financial Management Information System (IFMIS). The bureau also established that there was no contract between government and [the company],” she said.
Ndala said the suspect will be charged with corrupt performance of functions by a public officer and abuse of office.