K577bn reduced to K236bn: Malawi ‘grand corruption’ report reveals ‘big rigging’ scheme

The K577 billion (about $856 million) plunder of public money between 2009 and 2014 has been reduced to un-reconciled amount  of K236 billion, according to the  forensic audit conducted by RSM Risk Assurance LLP of the UK.

Stephenson Kamphasa, the Auditor General

Stephenson Kamphasa, the Auditor General: Report sent to parliament

The summary of the audit reportsays the K577 billion that is regularly quoted as unaccounted for is incorrect and has reduced the un-reconciled amount to K236 billion.

“It is likely that the remaining unreconciled amount could be reduced further if additional analysis were to be taken,” the report in its Executive Summar.

Auditor General Stepheson Kamphasa has since submitted the report to Parliament and shall be referred to Public Accounts Committee for further scrutiny.

Collusive activities

It has also revealed  that there has been collusive activities in the way government has been awarding its contracts confirming that bid rigging and manipulation has been plaguing the Capital Hill – the seat of government in Lilongwe.

The audit reveals that K83.5 billion was paid to 44 of the businesses which were selected as part of the sample of 50 businesses which matched to the bank transactions.

The report says to date, 13 businesses and K17.08 billion have been subject to review and that of these 13 cases alone have allowed the audit to identify at least $19.6 million in possible savings and recoverable costs.

These are $14.2 million in overpayments for goods and services; one duplicate payment of $5.45 million which the report says should be subject to immediate recovery; and $29 166 overpayment on shipping to wrong locations.

Accoring to the report, there is evidence to suggest that a number of cartels are winning contracts through restricted tender and single source procurements sometimes to supply quantities that do not reflect the actual needs of the MDAs.

“These groups of suppliers are owned by the same individuals with the majority of trade being inter-company implying that limited actual trade exists,” reads the report,  adding:“This suggests ‘layering’ a method sometimes used to hinder or prevent investigations in accurately tracing the source or destination of transactions and flow of funds.”

It reports that the use of bank cheques to move funds between related suppliers could be seen as an attempt to deliberately conceal the audit trail.

“Of even more concern is that we have gathered evidence which suggests that manipulated procurements have taken place as late as December 2015 and are therefore likely to be continuing,” says the report.

List of shame

President Peter Mutharika’s trusted allies are among 7 ministers implicated in the report.

Also named on the “list of shame” are Asian business persons.

But Auditor General refused to name and shame those implicated.

Public Affairs Committee (PAC)  asked government to speed up prosecutions of those involved in the ‘grand corruption’, saying there should be no sacred cows.

PAC chairman Felix Chingota courageously told Mutharika in the face to ensure he brings DPP and government officials to book if evidence linked them to the multibillion loot of government money at Capital Hill.

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11 thoughts on “K577bn reduced to K236bn: Malawi ‘grand corruption’ report reveals ‘big rigging’ scheme”

  1. Malawi says:

    We love cash gate. Let’s keep it going.

  2. Gerard mapanga Phiri says:

    Those are the politicians in Malawi greedy is what they believe,corruption is the habit. They can’t get rich in straight way without destroying the country

  3. Bullet says:

    The problem cannot be solved by those who created it. What we need is the removal of all implicated individuals for due process to take its cause. The president is highly compromised in this case, therefore not best positioned to address these matters. We need leaders who can die for this country.

  4. Kenkkk says:

    Amazing. But more worrying is the revelation that cashgate is continuing, still alive and kicking.

    Are you serious Peter? No, you and your dpp associates are at centre of it.

  5. Dr Mbilixi says:

    Wathawila ku ethiopia wina.

  6. Nyondo says:

    I am pissed of with this reporting: “7 ministers”. Don’t they have names? List their names down please, otherwise if you don’t have any information that implicates those most hated 7 ministers then just keep quite. Zip up your lips. You know for sure there are no ministers in that report this is why you don’t have names here and you keep on saying “7 ministers”. You are wicked.

    1. Dr Mbilixi says:

      Joliji chapondera, Hanze Samu, Patriach Kaliath, Jen Kalira, Brighton Saka, Takondwani Nakhunwa and Franco kutsaila. All these were conduits to this high level thievery and thuggery. Mxiiiieeee

      1. Nyondo says:

        Hahahahahaha wandisekesa iwe. I guess this is the list of people you are jealous of. I don’t remember Francis Katsaila being a minister during Bingu administration.

  7. Chambe says:

    From K260b to K236b. Next will be from 7 ministers to no minister. Half baked news! APM has no good reason to suspend his Ministers.

  8. The Analyst says:

    O………………………………………………………………………………………………………………………………………………………………………………………………………………………..O
    ONE OF THOSE SOME TIMES

    Its not surprising that the figure is reduced.
    . . . Truth is . . .
    Depending on who initiates the investigation; the figure will always change – upwards or donwards.
    . . . What’s known however is that,
    Just as the Muluzi’s K1.7bn (reduced to who cares what amount), the DPP-led govt is more than happy hence motivated to see the figure reduced to as low as possible.
    . . . But should Malawians be happy that they (whoever it is) only stole K236bn and not K577bn? Never!
    . . . And how does the figure just fly from K577bn to k236bn? Such a huge difference!
    . . . Is the one who conducted the initial investigation, egregiously incompetent, for RMS to justify the downward revision?
    . . . Something must be wrong, somewhere!
    ………………………………………………………………………….
    If people care to read wildly. widely and weirdly,
    . . . they would know that Anderson (one of then big five audit firms in the U.S.) certified that Enron’s (U.S. firm) financial statements were perfectly fine; and yet what followed was the biggest financial scandal at Enron; and a revelation that Anderson was paid handsomely to keep schtum.
    . . . Corollary, anybody will be too naive to trust this RMS Assurance LLP, in toto.
    . . . And have people already forgotten how the Baker Tilly report hid so many big names?
    Sometimes, the audit and assurance firms only investigate, find and report what the client orders them to.
    . . . and this may be one of those some times.
    O………………………………………………………………………………………………………………………………………………………………………………………………………………………O

    1. Diskova says:

      Some good points made here. Interestingly if you look up RSM Assurance, you will find out that they and Baker Tilly are one of the same.

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