Why red flags couldn’t be detected

Hon. Folks, the Pricewaterhouse Coopers (PwC) audit analytics of May 15 2015 may not have exposed anyone as did the Baker Tilly forensic audit of 2014.

What it has done though, is to show that within five mad years (2009 to 2014), this economy, small as it is, probably allowed as much as K577 billion to slip through government fingers.

Are you curious to know how government managed its revenue between 2004 and 2009 or during the first decade of multiparty dispensation? That is a K375 million question for the reconstruction of the cashbook alone, going by the cost of audit analytics by PwC. What is highly probable though is that the plunder rocked those previous years as well.

PwC are now expected to do a forensic audit. That has the potential to expose the Cashgate  of the late Bingu’s short second term remembered for his intolerance to dissenting views and the zero-deficit budget which exploded in government hands, shattering the economy in the process.

To date, the national economy is still on crutches, buoyed by heavy taxing of poverty, massive borrowings and huge budget cuts on allocations to operations and investment.

Bilateral development partners who used to provide 80 percent of the development budget and up to 40 percent of the recurrent budget, cringe at the mention of government’s Account Number One.

They will not allow a cent of their tax-payer’s money to be spent through the government system. There are thieves at the Capital Hill, who connive with other thieves in the private sector to fleece government and stash billions of public kwacha in their dirty pockets.

Obviously, many Malawians are waiting for PwC’s forensic audit with bated breath. Government, on the other hand, may wish this never happened before the 2019 elections. Voters rejected Joyce Banda in 2014 largely due to the Cashgate expose of 2013 and its consequences.

It was fun when DPP pointed fingers at its nemesis, PP, for the K24 billion Cashgate that Baker Tilly’s forensic audit exposed. But the K577 billion under PwC microscope is a larger picture of a K92 billion scam of Bingu’s second term. Many in APM administration today, including APM himself, served in the government which is under scrutiny now.

There just might be a price to pay, if another Cashgate scam is revealed now when hard-working and law abiding Malawians are suffering as a result of bad economic management by those entrusted with sovereign authority.

You indeed have to be extremely naive, if not outright stupid, to assume that the encashment of government cheques the records of which were deliberately manipulated or deleted outright from the government cashbook, could be for anything other than Cashgate.

It had to take the expertise of PwC South Africa to piece together the cashbook by retrieving the deleted data from servers in the Accountant General’s office. Pure fraud!

But can the expected forensic audit go beyond tracking the bad guys who stole from government and expose how the loot was used? The Baker Tilly audit raised this expectation but to no avail. I do not believe it is without a good reason that a government can snore on the job while over K100 billion is being siphoned out of the government system a year for five years.

Such betrayal of our trust could be linked the rags-to-riches lifestyle trend of our presidents and their political parties.

Former president Bakili Muluzi used to splash millions at campaign rallies. When his time in government expired, his successor slapped him with a K1.7 billion fraud case which hasn’t been concluded, a decade later.

Bingu wa Mutharika enjoyed a rich cowboy life while in office. When his time expired, his successor claimed he had amassed K60 billion assets during the eight years he was in office! Joyce Banda did her globe-trotting with a legion of hangers-on who were booked in expensive Manhattan hotels for a month. She used to brag that she was using her own money. Today, she is on the run from her own country.

All these presidents were earned less than K2 million a month? Where on earth did they get the money they were spending so recklessly?  How did their parties become extremely rich overnight?

The more questions we ask the more it becomes apparent that reforms in the public sector should start with the presidency. Unless immunity and powers  for this office are trimmed significantly—something the incumbent champions albeit verbally so far—it would be hard to manage red flags in the public finance management system, unless the president gives the nod.