Tonse goes two years without audit reports

 For two financial years the Minister of Finance and Economic Affairs has not submitted audit reports on government accounts to the National Assembly for scrutiny, a development governance observers say could be musking fraud, corruption and impunity in the public service.

Former chairperson of the Public Accounts Committee of Parliament (PAC) Shadric Namalomba confirmed in an interview this week that the last audit report on government accounts to be presented to the National Assembly was for the financial year 2019/2020.

Section 184 of the Constitution and 15 (1) of the Public Audit Act demands the Auditor General to submit to the President and to the Speaker of the National Assembly, audit reports on government accounts by 31 December each year.

The Act in Section 19(1)(a), says part of the functions of PAC is to examine and report to the National Assembly on the financial statements of the government generally; and in particular to examine and report on the financial statements of the government in the light of the outputs proposed and the performance criteria in the relative estimates, together with each statement and report of the Auditor General presented to the National Assembly.

Namalomba wondered whether NAO’s failure to present audit reports to the country’s supreme oversight institution since 2020 means the office did not complete auditing the accounts or is simply a disregard of the obligation.

NAO’s failure to present audited accounts comes on the back of public finance management failures that have in the past cost government billions, according to respected public officials and watch dogs.

In 2001, the then Director of Public Prosecutions Fahad Assani said 30 percent of the national budget is lost through fraud and corruption. Former director general of the Anti-Corruption Bureau (ACB) Rizine Mzikamanda, now Malawi’s Chief Justice, quoting an unnamed research also made a similar observation.

The same was echoed in October 2019 by a graft watchdog body, Action Against Corruption when its leadership met Parliament’s Legal Affairs Committee and Public Appointments Committee.

Former Auditor General Stephen Kamphasa told The Nation in 2020 that between 10 and 30 percent of public funds is lost yearly due to non-observance of well-established procurement systems and financial procedures.

But in his brief response to Weekend Nation inquiry on Tuesday, Secretary to the Treasury MacDonald Mafuta Mwale said all the audits for the financial years were conducted and completed, but referred the matter to the Auditor General.

National Audit Office (NAO) spokesperson Rabson Kagwam’minga said his office conducted audits of individual ministries, departments and agencies (MDAs) for the year ended June 30 2021 on time and submitted reports to the MDAs as well as the Office of the President and Cabinet and Secretary to the Treasury.

But he said: “However, we could not complete the audit of the consolidated financial statements timely because Ministry of Finance and Economic Affairs required more time to resolve some technical issues observed during the audit.

“The audits of government financial statements/accounts for the year ended 30th June  2022, on the other hand, are currently underway. We have since completed audits of individual MDAs and will soon be concluding the audit of the consolidated financial statements/accounts.”

Asked when the audit reports will be submitted to Parliament, Kagwam’minga said: “As soon as possible”.

“As required by the law, the reports will be submitted to Parliament through the Minister of Finance. Our intention is to have at least the 2020/21 report tabled during the next sitting of Parliament.”

But the deposed PAC chairperson, who served the committee between 2020 and October this year, said since the Tonse Alliance administration took over power the committee has never received an audit report on government accounts for debate.

“As we speak now, nothing has been laid before the National Assembly. The Tonse Alliance administration took over government in 2020 meaning they were by now supposed to have presented to the National Assembly reports for financial years 2020/2021 and 2021/2022.”

Namalomba, a Democratic Progressive Party (DPP) legislator for Mangochi South West, said they, as a committee, had been wondering why the audit reports have not been taken to Parliament.

“I will be left speculating that with all the corruption and looting of public resources going on, all is not in order in government and that is why they don’t want to present the audit reports to Parliament. But we will force them to do so,” he said.

According to Namalomba, failure to present the audit reports to Parliament has serious threats to public funds as controlling officers may be compelled to spend beyond budgets knowing they will not be held accountable.

“Besides, in the absence of audited financial reports there cannot be effective provision of the oversight role due to lack of accountability and those looting public funds will continue doing so because there are no checks and balances. As such Malawians will continue having their hard-earned resources abused either through mismanagement or misprocurement,” he said.

While the audit reports for the two financial years remain unreleased, the Auditor General report on government accounts for the year ended June 30 2019 revealed that K35 billion in public funds was stolen.

And this amount, according to the revised 2019/2020 National Budget, was enough to fund the entire Ministry of Gender, Children, Disability and Social Welfare for one fiscal year and run the struggling Malawi Prisons Service for three financial years.

Centre for Social Accountability and Transparency executive director Willy Kambwandira described the situation as unfortunate particularly for a government that was voted into power on the promise that it will promote accountability and end corruption.

He said: “We are not surprised because the National Audit Office has been under arrest for too long now and deliberately rendered idle. The fight against corruption and fraud can’t be won without this important office. Parliament needs to push for consolidation and revamping of NAO so that it becomes proactive.”

Kambwandira claimed the auditor general has also deliberately been put on acting position for three years as he cannot make certain decisions, which “in essence means his survival is on the powers that be, he is compromised.”

“Sadly, the Public Accounts Committee and Budget and Finance Committee have been reactive rather than proactive too on the matter,” he said.