K68m for Malata Subsidy vanishes in Mchinji

At least K68 million meant for the Decent and Affordable Housing Subsidy Programme (DAHSP) in Mchinji was misappropriated in 2015 and suppliers remain unpaid two years later, Nation on Sunday can reveal.

Meanwhile, authorities are yet to take disciplinary action on officers suspected to have abused the funds despite recommendations from the National Local Government Finance Committee (NLGFC), which is entrusted to ensure financial prudence and accountability in local councils.

An investigative internal audit report on DAHSP funds for the district for July 1 2015-September 15 2016, which we have seen, shows that funds amounting to K33 518 735 20 in expenditures, could not be accounted for and that payment vouchers and requisitions were either not certified or authorised by the responsible personnel.

The audit report also revealed that funds amounting to K52 975 158.00 were used for other council activities unrelated to DAHSP.

Following the suspected funds misappropriation, the council through NLGFC, engaged an independent auditor from M’mbelwa District Council to do an independent evaluation of the management of the funds.

Nation on Sunday understands that the scope of the investigative audit extended not only to the council’s secretariat, but also to all sectors, programmes and activities carried out using DAHSP funds.

“It is in the opinion of the internal auditor that the council’s internal controls were very weak during the period under review and the council management did not manage the DAHSP and other funds in [District Development (DDF)] bank account prudently, such that funds amounting to K50 567 104 were borrowed by other programmes leaving the DAHSP activities on hold,” reads the report in part.

It recommends that the council should engage heads of sectors that were managing the programme that had overspent in the period under review so that a refund process is initiated.

Some of the recommendations in the report include that a chief accountant and two other officers  be summoned for disciplinary hearing before the matter is referred to the disciplinary and appointment committee for further actions and consideration.

The chief accountant signed for an accumulative amount of K4.5 million while another officer paid out K22.9 million, but the payments did not have supporting documents.

In addition, they were not completely authenticated by the relevant officers. NLGFC acting executive secretary Naluwa Tchuthi said in a telephone interview that they expect that appropriate action will be taken on the suspects and that the money will be recovered.

He said: “As you are aware, we now have councillors in place so our recommendation is that let the matter be taken to the council on the way forward, and if the matter is beyond discipline then it can be reported to police.”

Former district commissioner (DC) for Mchinji, Richard Hara, during whose time the misappropriation occurred, refused to comment when asked about the mess.

The DC, who was transferred to Karonga late last year, explained that he has the no mandate to speak on behalf of Mchinji District Council or anything that happened the time he was there.

“It is not ethical for me to comment on issues from another district. I handed over everything including the issues you are referring to. All the actions I had taken on this matter, the DC who is there now is aware and is better placed to comment,” said Hara.

Asked why it is taking long for the council to take action, Mchinji DC Rosemary Nawasha, who joined the council from Karonga in January this year, said she is waiting for the Ministry of Local Government and Rural Development to provide guidelines on the way forward.

But when it was put to her that the ministry’s spokesperson Mhlabase Mughogho had indicated that the matter needs to be dealt with at council level, the DC insisted that an auditor at the ministry is handling the issue.

One of the suppliers, Lyson Kasiya, was expecting to receive his payment of K2.1 million on December 16 2015, but almost two years later, the council is yet to pay him.

In an interview, Kasiya, who is a carpenter based in the district, indicated that he supplied wooden doors, window frames, fitted glasses and rim locks to two housing development groups (HDGs) using his own money.

“Kumwenda from the council is the one who was following up on my issue, and he told me that officers who misappropriated our funds were asked to refund and that we should wait as the money will be deducted from their salaries. What if the people that squandered our money retire or, God forbid, die?” he said.

Another carpenter, Luciano Cosmas, who supplied similar components to one HDG and is owed over K1.6 million, told this paper that he is now in huge debt following failure by the council to pay him.

Other weaknesses of internal controls highlighted in the audit report that need tightening up include incompetent accounts assistant managing DDF, failure to do bank reconciliations monthly, fuel ledgers missing and failure to do liquidation on payment of staff.