NACgate: Audit exposes abuse at NAC, queries funding to JBF

While the dust is yet to settle on the uproar sparked by revelations that National Aids Commission (NAC) funded First Lady’s Beam Trust and Mulhako wa Alhomwe, an investigation into NAC operations has exposed details of how State House and Joyce Banda Foundation International(JBFI) obtained the commission’s resources under dubious circumstances between 2013 and 2014.

The damning National Audit Office (NAO) investigative audit report, which probes NAC operations between June 2013 and July 2014, questions why State House/ the Office of the President and Cabinet (OPC) borrowed four vehicles from NAC without written justification for the request.

The report further notes that NAC officials flouted procedures in lending out the vehicles—registration BP6963, BQ9040, BN6263 and BS1036—in April and May last year, the time former president Joyce Banda was in power.

Question marks have also emerged, in the report, on how president Banda’s JBFI and another organisation, 7Dignitas, had their grants revised upwards by K33 829 354.05 and K10 224 550 respectively, when other organisations had been denied funding due to limited funds.

The revelations, emerging at a time the country has been demanding explanations on how First Lady Gertrude Mutharika’s Beautify Malawi (Beam) Trust and tribal grouping Mulhako wa Alhomwe—to which President Peter Mutharika is a member—got K15 million funding for activities unrelated to the fight against HIV and Aids, raise concerns about  political interference in the running of the commission, commentators have observed.

Malawi Health  Equity Network (Mhen) executive director, Martha Kwataine, warned in an interview on Thursday that continued political interference and abuse of resources at the donor-funded institution mandated to spearhead HIV and Aids national response threatens sustainability of funding, putting at risk lives of over one million Malawians currently living with HIV.

Over 90 percent of the country’s HIV and Aids funding comes from donors, according to Ministry of Health.

Banda’s spokesperson Andekuche Chanthunya could not be reached for comment this week as his phone went unanswered on Thursday and was out of reach on Friday.

NAC officials refused to comment on the report findings this week, but minutes of a recent extraordinary board meeting indicate that the board members described the report as “incomplete and generally inconclusive”.

However, the audit report notes that the manner in which State House borrowed the vehicles contravened NAC’s vehicle management procedures which require the head of logistics to lend out vehicles if there is a clear written justification from the department making the requisition.

“…There were no formal written instructions on the way the vehicles were released and received back….Vehicle BP6963 was involved in an accident  and in the absence of evidence of date of return we cannot ascertain which entity (State House or NAC) the vehicle was with at the time,” queries the November 2014 report.

The report also states that the grants facility at NAC has been mismanaged with funds being channelled towards activities far removed from HIV and Aids.

Without specifying the names of the undeserving recipients, the audit report mentions that NAO is still investigating how several organisations qualified for NAC funding, and further cautions the commission’s management to consider funding only NAC-related activities.

But reacting to the report findings, Kwataine said the issue is “too sensitive” and has come at the wrong time when donors are getting tired, hence threatening funding sustainability.

“We have been discussing with donors and our effort is to ensure that they do not pull out. I am happy to say that the Global Fund has showed commitment to give continued support to us, but we need to be committed and clean our mess and ensure we hold our government accountable so that we can win back the donor confidence to continue helping us.

“We really need the HIV/Aids aid because I can challenge everyone that if the aid is to go and we start to buy ARVs on market price, even I cannot afford and people will perish,” she said.

According to Ministry of Health statistics, 521 319 Aids patients were on ART by end of September 2014, meaning that 52 percent of the estimated one million HIV-positive population was on ART.

Kwataine, called for change of laws to ensure that public positions are protected from political interference.

Her view was shared by Chancellor College political scientist Blessings Chinsinga, who saw the ongoing public sector reforms as an opportunity for government to end political interference in public institutions.

“I would speculate that the appointment of the staff at the institution is the main problem. It is easy for NAC to be influenced by politicians in power because they are appointed by the same people. So if they apply for funding, NAC has no option but to prioritise them against other equally deserving applicants,” said Chinsinga.

He, however,  saw no immediate solution to the problem.

“If they are serious about the reforms, we should expect a change. For the meantime, let us bank on the reforms,” he said.

—Other revelations in report —

The report, discloses that NAC disregarded its own procedures of assessing expressions of interests on a majority of grant recipients, noting that out of 41 randomly selected disbursements totalling K793 951 763. 58, only one, Seventh Day Adventist, was assessed using NAC’s expression of interest checklist.

“All the organisations had had no checklist in the files. Further, most organisations did not fulfill the requirements for them to qualify such as producing audited financial statements and endorsement letters in the districts of their interventions,” reads part of the report.

The report also questions how the commission’s executive director, Dr Thomas Bisika, recommended the hiring of an accounts assistant who was on position 12 during interviews.

According to the report, the hired candidate scored 72 percent and was beaten by 11 other candidates, yet Bisika offered her the job when her name did not even appear on the list of names that were recommended by the interviewing panel.

“This raises question marks on the merit used by the executive director of offering the post to unrecommended candidate. Further observation showed that the executive director did not consult or get any advice to offer the number 12 candidate [the job] which raises the question of criteria used by the executive director,” reads part of the report.

The report also questions the procedure NAC used to recruit monitoring and evaluation officers, noting that the criterion employed in the selection of three candidates was discriminatory as the vacancy advert stated that candidates should have a bachelor’s degree with credit.

“This was not in tandem with general recruitment procedures by providing preferential credit degrees which are discriminatory unless there is a good reason why the panel used this criterion,” argues the report.

It further notes that one of the three successful candidates was offered a different grade from the one “as per establishment”.

In procurement, the audit report notes anomalies in the way one company was awarded a contract to supply two million units of A4 size 80 pages notebooks with health, nutrition and HIV/Aids messages.

While other bidders were rejected because they did not indicate payment terms, the successful bidder was given the contract even though they did not indicate the same.

“There was a responsive bidder who actually quoted the price at least within the budget but instead of awarding the successful bidder the team went on to recommend [this company],” states the report.

Bisika, who was suspended last year pending investigation ordered by Office of the President and Cabinet on allegations of abuse of office, refused to comment on the matter when Weekend Nation contacted him on Thursday.

NAO undertook the investigative audit to establish whether Bisika abused his authority by employing people not deserving to be offered employment; whether there was evidence of looting of donor funds and other fraudulent activities; and also whether NAC did not follow procedures in awarding grants.

NAC board chairperson Mara Kum’bweza Banda also refused to comment on the report, but minutes of an extraordinary board meeting, attended by nine members including Banda, and held on December 17 last year indicate that the board observed that the auditors should have engaged the executive director to get his feedback prior to drawing conclusions in the report.

“The board is of the opinion that a disciplinary hearing be constituted either by the board or committee of the board to clear the issues and hear the executive director out,” read the minutes.