About K350 million has not been accounted for by city, town and district councils, four months after the Malawi Social Action Fund lll (Masaf lll) ended, The Nation has established.
In a leaked document addressed to all councils, the funds were disbursed by the Local Development Fund (LDF) through the Masaf III Project funded by the World Bank and were meant for implementation of activities covering public works programmes, capacity building activities, supervision of solar installations and completion of sub-projects.
Ministry of Finance, Economic Planning and Development has since threatened the councils with a reduced budget allocation.
The councils in question include Dedza, Chitipa, Dowa, Kasungu, Lilongwe, Likoma, Mangochi, Phalombe, Mwanza, Rumphi, Thyolo as well as both Blantyre District and Blantyre City councils. The highest suspect is Kasungu with K100 million unaccounted for expenditure, and the least is Rumphi with K900 000.
“You are requested to submit these reports to LDF before close of business on Wednesday 15th October 2014. This will enable LDF to compile a consolidated report and submit to World Bank before the funds are declared ineligible expenditures,” reads the statement.
In an interview, spokesperson for the Ministry of Finance Nations Msowoya said: “Funds used for Masaf were borrowed from the World Bank and will be repaid over a period of 40 years, including a grace period of 10 years.
“Taxpayer’s money will be used to repay the loan.
“The issue is not unaudited accounts, but non-submission of receipts or reports on expenditures by councils who were given money in advance by the LDF to implement public works projects; among others, failure to submit receipts would be interpreted as if funds were not used correctly. The consequence is that the Malawi Government will be required to refund these monies back to the World Bank.”