Malawi army, State House, state spies skipped in payroll audit – Report

National Audit Office (NAO) has asked for more funding  to complete  the national headcount in the civil service to cover State House, Malawi Defence Force, National Intelligence Bureau and Chiefs who were skipped during the exrcise  in April this year,  it has been reported.

Finance Minister Goodall Gondwe told the International Monetary Fund (IMF) that  Malawi government  conducted a payroll audit to “strengthen control” over the wage bill with donor funding.

Gondwe  in his letter of Intent to IMF and other donors dated June 2 2016 said Malawi concluded a headcount in April 2016, which revealed that “an estimated 10 percent of the labour force of 177 000 employees needed further tracking to establish their authenticity.”

But according to press reports,  State House, Malawi Defence Force, National Intelligence Bureau and Chiefs were not covered

NAO spokesperson Rabson Kagwamminga is quoted in the Weekend Nation that the decision to skip the army and State House  was not reached arbitrarily.

The paper reported that  the headcount could lead to a bloated wage bill through paying ghost workers.

The weekly quoted Auditor General Stephenson Kamphasa statement in  the Executive Summary of the headcount report, that as mandated by Public Audit Act of 2003 his office conducted a national exercise from November 2015 for the whole civil service “except the Malawi Defence Force, State Residences, National Intelligence Bureau and Chiefs.”

Gondwe also told the paper the headcount the exercise removed 2 300 people from the payroll, a measure he said is expected to result in a reduction in the wage bill by an estimated K4.1 billion this fiscal year.

“The headcount that was concluded in April 2016 will help eliminate ghost workers, stopping illicit editing of the salary schedule, ceasing overstating salary funding, and eliminating employees beyond the retirement age,” Gondwe is quoted saying.

He said the  payroll audit revealed a number of weaknesses in internal controls in management of the wage bill and that his ministry has since taken measures to resolve the problem.

Accoridng to the Finance Minister, the headcount revealed that an estimated 10 percent of the labour force of 177 000 employees needed further tracking to establish their authenticity.

The civil service has a long history of ghost workers which have been costing Treasury a lot of money and over the years government has experimented with various measures to root out the problem, the paper noted.

The headcount was done against the background of a report released last year by audit and financial advisory firm Pricewaterhouse Coopers (PwC) which showed that K577 billion in government bank statements could not be reconciled between 2008 and 2014.

It turned out that the K7 billion pilferage through ghost workers was just a tip of the iceberg in financial malfeasance in government after the PwC analysis report on the reconstruction of the government’s cashbook revealed that K577 billion may have been stolen through dubious payments for supplies to government in the five years up to December 2014.

A forensic audit by the RSM Risk Assurance Services LLP of UK on the K577 billion audit report released last month reduced the amount to K236 billion but found that the country’s security organs-MDF and Malawi Police Service-topped on financial malfeasance related to fraud and procurements and payments that did not match goods and services delivered and rendered.

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