Macra K1bn payout raises eyebrows
An audit into parastatals’ financial transactions has revealed that the Malawi Communications Regulatory Authority (Macra) paid K1.043 billion annual maintenance fee for a software the contractor had not handed over.
The facility under query is the Consolidated Information Communication Technology Regulatory Management System (Cirms) widely known as the spy machine, which Agilis International supplied.
According to the Auditor General’s (AG) report which focused on 19 selected statutory bodies’ accounts for the year ending June 2020, the Ministry of Finance and Economic Affairs submitted the report to Parliament last week.
The report defines the software maintenance fee as “the annual cost that one pays for upgrades and support of the software.”
AG Thomas Makiwa writes: “A review of payment vouchers in respect of the Cirms revealed that during the period under audit, Macra started paying maintenance fees amounting to K1.043 billion ($1.4 million) for a system which is not fully operational and has not been handed over.”
He said although it has categorised Macra as a low risk in terms of its financial transactions, this payment and other weaknesses threaten to dent the communications regulator.
“Management should work on the lapses in internal controls, which are so apparent and may impact negatively on the operations of the authority,” the report further reads.
The other irregularity the audit established was K252.3 million Macra paid to National Statistical Office (NSO) to carry out a National ICT Survey at household level.
The research was designed to assess the developments that have occurred in the ICT industry and its contribution to the economy.
Macra, the audit report found, transferred the money to NSO Reserve Bank of Malawi account in three phases.
“A review of records pertaining to these transfers revealed that there were no returns or financial reports attached to these transfers such that the audit team failed to ascertain whether the funds were utilised for the intended purpose,” the AG points out.
On his part, Macra public relations manager Zadziko Mankhambo in a written response, said the payment was for upgrading of the system.
“Payment of upgrades for Cirms was due to changes in technologies: 4 G and LTE introduction had to be catered for in the system. Plus the delay in implementing the project rendered the equipment obsolete. The money was paid through FDH Bank,” he said.
Meanwhile, Parliamentary Public Accounts Committee (PAC) chairperson Mark Botomani has said his team will launch an inquiry into the matter.
“As PAC, we are interested in the protection of public resources and we do this through our oversight role. In the case of Macra, it is the committee’s considered view that due diligence was not adequately carried out.
“The fact that they commenced legal proceedings against the maintenance dealer shows that there was somehow negligent of duty.
“As a committee, we will be meeting soon after plenary to, among other things, commence scrutiny of this issue,” he said in a written response yesterday.
Commenting on the matter, the National Anti- Corruption Alliance chairperson Moses Mkandawire called for a thorough probe into the Cirms maintenance fee payment.
“How could a transaction of that magnitude be paid given that the system was not operational as the Auditor observed? Something ought to have been done indeed which requires thorough investigations,” he said.
The Cirms was procured in 2010 for $6 million, but its operationalisation was delayed by court battles as telecommunication companies and individuals objected to its installation on the grounds that it would infringe on people’s privacy.
However, the Supreme Court of Appeal cleared the regulator to start implementing the Cirms in June 2017.
