K577bn report scrutiny starts

Public Accounts Committee (PAC) of Parliament has embarked on a scrutiny of the data analysis report that revealed that about K577 billion (about $856 million) in public funds could not be accounted for between January 1 2009 and December 31 2014.

Confirming the development in an interview on Monday, PAC chairperson Alekeni Menyani said his committee would work with the National Audit Office (NAO) to review the document that exposed how deep and spread the pilferage of public funds has gone in Malawi.

The move comes 10 months after the report, prepared by audit and business advisory firm PricewaterhouseCoopers (PwC) titled Financial Analysis Report: Reconstruction of the Malawi Government Cashbook for Purposes of Further Investigation was tabled before Parliament.

After the scrutiny, PAC is expected to submit recommendations to the whole House.

However, the report would be submitted to Parliament just before the release of the forensic audit being carried out for the period 2005 to 2014, which is currently in progress following a 10-month timeline Auditor General Stephenson Kamphasa gave the nation last year.

Hitherto, PAC had been failing to meet on the report due to lack of funding amid accusations and allegations between Treasury and Parliament Secretariat that the Executive did not want the committee to scrutinise the PwC data analysis report.

Menyani said much as the report requires a consultant to assist the committee analyse it, members have resolved to use officials from the National Audit Office (NAO) to expedite the process.

He said the committee was far behind in its reports and could not afford to delay any further.

Said Menyani: “When we went to Treasury, they threw us back to Parliament, saying that a lump sum was already given to Parliament and it is our prerogative on which committee meeting to prioritise.

“We have a lot of work and cannot afford to delay, so members have agreed to prioritise the K577 billion report. We will be working even up to 9pm and minimise breaks until we are done.”

The committee, with the help of the Auditor General, will undertake a comparative analysis of the PwC data analysis report and another one carried out by new auditors, RSM Global.

“Parliament will then produce a report of recommendations which will be given to the whole House by June,” said Menyani.

NAO spokesperson Lawrence Chinkhunda last evening confirmed that the AG briefed the committee on the PwC report and it would be discussed within the week.

Commenting on the progress on the forensic audit, he said: “Malawians should know that it is on track.”

On the other hand, Henry Chingaipe, a governance and development specialist, in an interview last evening commended the committee for preferring the Auditor General over an independent consultant, arguing that in principle, the AG’s office should work under Parliament and not the Executive as is the practice in Malawi.

He said: “So, the decision to get the assistance from the Auditor General [on the PwC report] is perhaps a welcome one to the extent that it begins to bring the practice in conformity with the principle under which the Auditor General is an agency of Parliament.

“The fact that the Auditor General knows that he is going there as second best option should motivate him to demonstrate his independence and expertise in the service of the nation so that Parliament can effectively carry out its oversight role by bringing accountability on how public resources are spent by the Executive branch.”

Initially, PAC was scheduled to have PwC take them through the analysis. PwC also offered to pay for a committee meeting, but government and the AG said the arrangement was not procedural.

Apart from the K577 billion report, the committee will also scrutinise audits of 15 local councils dating back to 2009/10 over the next four days.

In a June 19 2015 statement, NAO said the analysis had identified significant discrepancies between payments made from government bank accounts and cashbook records held in the Integrated Financial Management and Information System (Ifmis), the government’s electronic payment system.

Revelations of the K577 billion unreconciled government financial statements came hot on the heels of a forensic audit report by British firm, Baker Tilly, that established that K24 billion () was looted from Capital Hill between April and September 2013 under the administration of Joyce Banda and her People’s Party (PP). n