Germany, United Kingdom, Norway, Ireland and The European (EU), who are backing the forensic audit into the K557 billion (about $883million) ‘cashgate’ between 2009 and 2013 want the investigations done under heightened ecurity and secrecy to prevent compromising investigations following the break in and theft of documents related to the probe at a house of a GIZ —Germany development arm— official in Lilongwe earlier this year.
Information of the probe will be released when the exercise is completed as Malawi government and the media has been urged by GIZ “not to make public any information about the audit team’s work and schedule.”
GIZ is providing technical support to the audit.
Katrin Pfeiffer, Deputy Head of Mission and Head of Development Cooperation at German Embassy in Lilongwe, said: “Confidentiality would serve a speedy, undisturbed and efficient review.”
According to quotes attributed to Pfeiffer in the press, “Upon completion, it will be for the Auditor General to decide how to take forward action on the audit’s findings, including communicating them to the public and Parliament in line with the Public Audit Act.”
Pfeifer said in the statement, the development partners that suspended aid to Malawi after a massive public sector graft scandal, were impressed by the commitment by Malawi Government to ensure a credible audit.
She explained that the audit was necessary following Price Waterhouse Coopers (PWC) ’s data analysis of Malawi’s financial management system from 2009-2014 which identified significant discrepancies between payments made from government bank accounts and the records held in Malawi’s public financial management system (Ifmis).
“It matched statements from government bank accounts with entries in Ifmis. The analysis showed that 43 percent of payments reflected in the government bank statements were not accounted for in Ifmis. These discrepancies suggest serious weaknesses in the implementation of the public financial management system, which require further investigation.
“The work undertaken by PWC on behalf of the NAO (National Audit Office) did not establish the exact amounts or causes of the discrepancies, nor whether any funds were misappropriated. As communicated by the NAO (press release), this data analysis is being followed up by a forensic audit. This is required to explain the discrepancies or establish if there was any theft of public funds,” she added.
According to Pfeifer , Malawi’s National Audit Office (NAO) remains the leading agency in the audit of the cashgate despite donors assisting .
In 2013, Malawi uncovered a corruption ring involving government officials, in which over K24 billion taxpayer funds was swindled from state coffers, according to an audit already done by British auditors Baker Tilly.
The scandal, dubbed “Cashgate”, prompted foreign donors – who provide around 40 percent of Malawi’s budget – to pull the plug on aid.
The pilfering of public funds is said to have taken place over just six months, from April to September 2013, during former president Joyce Banda’s term in office.
Banda blamed on “loopholes” in the public payment system introduced by her predecessor Bingu wa Mutharika.
Pfeiffer said there were suggestions the looting actually took place over a longer period dating back to 2009 when Mutharika, who died suddenly in 2012, was in power.
The K577 billion audit will be conducted by PriceWaterhouseCoopers.
The Cashgate scheme is the biggest financial scandal in Malawi’s history and several people are facing trial while a number of convictions have been obtained.
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