Mist over K92bn forensic report

There is mist over the whereabouts and contents of what was supposed to be the K92 billion (US$204.4 million) forensic audit report; with Minister of Finance, Economic Planning and Development Goodall Gondwe telling Parliament that what he has is not an audit report, but rather a data analysis document.

Gondwe’s position echoed a statement from the National Audit Office (NAO) published on Monday that “the Auditor General has now informed Parliament about the results of a data analysis of Malawi’s financial management system, as a first step towards a forensic audit of the period 2009 and 2014”.

But Speaker of Parliament Richard Msowoya and chairperson of the Public Accounts Committee (PAC) of Parliament Alekeni Menyani said no such report had been submitted to their offices for scrutiny and further action.

In response to calls from Members of Parliament (MPs) demanding that a report be tabled before the House with haste to avoid tampering, Auditor General Stephenson Kamphasa issued the statement indicating that the report had been submitted to the House.

But the Speaker told the National Assembly: “Although the statement [that the report is with Parliament], it is not with my office. In fact, that statement is putting the office of the Speaker in disrepute. So, I have no comment to make on that.”

But the House nearly went into uproar on Monday when MPs demanded to confirm if indeed the statement from the AG was true only for Gondwe to inform Parliament that he had a report which was outlining methodologies, not the actual forensic audit.

Said the minister: “The report I have is just a methodology of the forensic audit, not the forensic audit, but a reconstruction of what might have happened. If members are of the opinion that I submit the report to the Speaker, then I will do so first thing tomorrow [Tuesday] morning.”

And Gondwe’s conciliatory tone did not placate the MPs, with Salima South West legislator Jessie Kabwila (Malawi Congress Party-MCP) stating that the fate of the committee of supply rested on the report being brought to Parliament.

However, Msowoya curtailed debate, asking the MPs to indicate what standing order should be used to prevent Gondwe from tabling the report on Tuesday.

In the statement dated June 19, the Auditor General clarified that what was available with his office, with financial assistance from the German government was a data analysis report as a first step towards a full forensic audit which would take approximately 10 months. The data analysis cost German taxpayers 250 000 euros (K125 million), according to NAO.

Kamphasa said the data analysis had identified discrepancies between payments made from government bank accounts and cashbook records held in the Integrated Financial Management Information System (Ifmis).

He said: “This is a data analysis not forensic audit, from analysis alone it is not possible to establish exact amounts or causes of the discrepancies nor how many of these funds were misappropriated.”

Two weeks ago, our sister newspaper, Weekend Nation, broke the story that the German-funded financial investigation conducted by audit and business advisory firm, PriceWaterhouseCoopers (PwC), was ready for release.

A NAO spokesperson was quoted as having said the audit report covered the period of five years from 2009 to 2014 and included the period the K92 billion was not accounted for.

The K92 billion mismanagement is believed to have happened under the watch of the first Democratic Progressive Party (DPP) administration led by former president the late Bingu wa Mutharika.

The report is coming 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).