They say past is prologue and an independent assessment report on Ifmis’ performance done way back in 2009 reinforces this saying in relation to the current Capital Hill cash-gate.
Had government acted on problematic findings of the assessment, Malawians may not have woken up to The Nation’s banner headline yesterday that a Treasury-sanctioned investigative audit of the Central Payment System (CPS), the Integrated Financial Management Information System (Ifmis), done between 2011 and 2012 by the National Audit Office (NAO), revealed that about K90 billion was abused between 2009 and 2012 through the system.
Among major grey areas in the introduction of Ifmis, according to the assessment that the Office of the President and Cabinet (OPC) sanctioned in 2009—was that the Bingu wa Mutharika regime implemented the package in a hurry and did so without a signed service contract with its supplier, Soft-Tech Consultants Limited.
Soft-Tech is a Tanzania-based authorised dealer which supplied Ifmis to the Government of Malawi.
The previous administration, said the assessment, had also rolled out the accounting software without all the programmes it had paid for. The modules left out were critical to the efficiency and security of the transactions, according to the assessment report.
Information we have reviewed also shows that the whole process of engaging Soft-Tech Consultants to implement Epicor, the Ifmis software, did not make business sense as it favoured the contractor (Soft-Tech Consultants) more than government.
It also cost taxpayers $1.7 million (over K680 million at current rates) more than anticipated, according to the assessment report done in 2009, four years after Ifmis was implemented.
The OPC-instituted assessment was carried out by independent consultants, McCarthy Phiri and Richard Chisala Jnr, whose task was to investigate and assess weaknesses in Epicor.
The two found several weaknesses in Ifmis and made recommendations to Mutharika.
But as we found out, nothing was done. This week, we learnt there was a lot of resistance to implement the findings and that feet-dragging spread the cancer and became endemic, which today has seen tens of billions of kwacha lost; enough money to scale up access to free antiretroviral treatment for thousands of people living with HIV and Aids.
A high-level OPC source who was privy to the report confided yesterday that the Soft-Tech Consultants contract “was indeed dubious and was not signed”.
Said the source: “This anomaly [lack of contract] led to huge implications. The government could not take the supplier of the system to task over any issues with the system.
“And it is the same anomaly that resulted into the supplier of the system to provide four functional modules and yet government paid in full for nine modules. And unfortunately, the modules that were not delivered were the most crucial that could have helped in proper tracking of Government resources.”
OPC spokesperson Arthur Chipenda asked for more time to prepare what he called “a comprehensive response after liaising with other concerned Ministries and Departments.”
The OPC-sanctioned assessment report found out that the Ifmis project did not have a legally-binding contract, raising questions about the entire contractual and engagement process, four years after it was implemented and three years before the NAO investigative audit revealed the multi-billion pilferage.
The other damning revelation in the report was that Soft-Tech Consultants did not fulfil their contractual obligations in that the system was partially delivered with only four functional modules of the complete financial suite which government fully paid for.
“Despite government paying for all key modules of the upgraded Epicor 7.2.3 financial suite, the Ministry of Finance, through the Accountant General’s Department [AGD], is currently using only four.
“The system does not have any alert system to detect any fraudulent activities or any deviations to normal operations within the system such as overriding system controls without appropriate approval process and any system performance issues, let alone a functional audit trail to track system usage,” added the report.
The allegations of corruption and embezzlement have become a massive setback for President Joyce Banda, who faces elections next year in May.
Many observers and diplomats in Lilongwe believe President Joyce Banda’s re-election depends on how she responds to the crisis.
So far, she has dropped some Cabinet ministers in an attempt to right perceived wrongs in her administration and has overseen the arrest of several civil servants.
Soft-Tech Consultants did not respond to an e-mailed questionnaire we sent them.
