‘Trust us with finances’
A preliminary report by the National Audit Office (NAO) early this year raised various issues of financial mismanagement at the Malawi Electoral Commission (MEC). Our reporter LUCKY MKANDAWIRE caught up with MEC’s spokesperson SANGWANI MWAFULIRWA who contends that the commission cleared up the matters with NAO.
NAO conducted an audit at MEC between November 15, 2012 and August 21, 2013 and its report, which Weekend Nation has sourced, shows that a number of queries were raised regarding financial mismanagement. What is your general comment on the report?
It is true that the audit was conducted during that period. As normal practice, auditors always raise issues in their preliminary reports for which they seek management explanation. Some explanations are readily available, others are not. If answers are not readily available, management investigates and brings answers to the auditors who have to assess whether the response suffices that the issue be dropped. Until the final report is issued, no draft is supposed to be thrown into public realm for discussion through the media as has been this case. Most of the issues that were published scandalising the commission were already cleared with the auditors and ought not to have been shared with the public as substantial matters.
The audit also reported that some commissioners and staff received allowances for foreign trips which they never undertook or failed to provide evidence of travel. What is your explanation?
When the current commissioners were appointed, they were supposed to go on study visits to Kenya and South Africa, accompanied by staff. The trips were postponed due to some circumstances after allowances had already been paid. It was arranged that when the trips would be rescheduled, the commissioners and staff would use the same allowances and only get a difference if need be. The trips were rescheduled and commissioners and staff did go for the study visits. Those who were supposed to go to Kenya went to Zambia instead from 7 to 13 April 2013. This was explained to the auditors and it was dropped in a subsequent draft audit report NAO provided to MEC. It was also prudent that they kept the allowances because returning them to the bank would have meant selling the forex at a lower rate than it was bought for and incurring bank charges when we apply again.
The audit is coming at a time when MEC is proposing protected funding so that when Parliament appropriates its funding, the money should go straight into its accounts and not through The Treasury and Accountant General. How can stakeholders trust that you will manage the fund prudently?
The protected funding will still be audited. The rationale for proposing a protected funding is to ensure that MEC operations run smoothly and that there is no outside interference, which can sometimes derail the electoral process. As it is now, MEC is at the mercy of the Treasury which can determine when elections should be held by releasing or withholding funding. The protected fund is an international best practice. Even Zambia practices it.
The audit also suggested that MEC refunded Bineth Trust for nomination fees for Democratic Progressive Party (DPP) parliamentary candidates in the 2009 elections when there was no evidence that they had paid nomination fees. In an interview last week, DPP secretary general EcrenKudontoni said some of its candidates paid for themselves while the party paid for others. What is your explanation of this contradiction?
Bineth Trust paid for all DPP candidates in the 2009 elections, hence, MEC had to refund the trust for all candidates who reached the qualifying threshold for a refund. The remarks by DPP secretary general refer to the 2014 elections. The query that was raised regarding the refund for the 2009 elections was explained to the auditors and they dropped it in their subsequent management letter. MEC has elaborate systems to ensure that only candidates who pay nomination fees should stand.
In the draft report, NAO says the finalisation of the audit delayed because management could not provide information on nomination fees in time. What is your explanation on this?
For the 2009 elections, the nomination fees were received at district council level. Some councils did not bring all the documentation when submitting their reports to the commission. The auditors from NAO were given all the resources to go and verify in the councils and to date, MEC is waiting for their report on what they found out. So, if the information delayed, they are also partly to blame for not finalising this assignment. However, you may wish to note that this system changed and nomination fees are deposited direct into the MEC account. This also averts the risks that come with handling cash.
The audit also faults MEC for having weak internal financial and operations controls, what measures have you put in place to address this?
With the experience MEC had gone through, the commission embarked on initiatives to strengthen internal financial controls and corporate governance. So far, it has managed to set up an internal audit department headed by a director with five full time staff. An audit committee, headed by a commissioner to whom the Internal Audit Department reports, has been set. MEC has also been keen to have audits done in time to such extent it has initiated audits by private firms. Apart from audits by the National Audit Office, the commission is audited by a private audit firm. The purpose is that queries arising should be responded to by the responsible persons.
MEC has been struggling financially and you had to postpone by-elections because your funding was depleted. How will stakeholders trust you?
By-elections are funded separately. The postponement of the by-elections was not because the funding had been depleted, as it was reported in the media. MEC had not received funding for the by-elections and that is why they were postponed. Now that we have been given the funding, we are proceeding with the exercise.
Any other comments?
We ask all stakeholders to have trust in MEC that it can handle finances very prudently. MEC has put in place measures to address risks. For example, nomination fees are now deposited directly into MEC’s bank account. Candidates only bring stamped deposit slips as proof of payment. With support from development partners, MEC also embarked on a system of direct bank transfers for all payments to poll staff as it is an auditable and secure process. MEC also sees that some of the audit issues that even led to its closure in 2010 are not necessarily an issue of fraud but a matter of supporting documents not being traced. To that extent, MEC has also started electronic filing of its vouchers and supporting documents which will offer backup in the event of physical documents not being found. MEC will soon be engaging a private firm to audit the 2014-15 financial year. This is besides the audits that are done by NAO. With the reforms that have taken place within MEC, we feel the internal systems have been strengthened and stakeholders should still have trust in us.
