MEC-cashgate: Director of finance ‘sacrificed’, on forced leave

The director of finance at Malawi Electoral Commission (MEC), Khumbo Phiri , has been sent on forced leave on suspected cashgate activities between July 2012 and December 2014 which Nyasa Times first reported following a special investigative audit .

The fraud allegations in the report before the Secretary to the Treasury and donor community, as conducted by the Central Internal Audit Unit under the Ministry of Finance following allegations of financial misconduct and fraud in the procurement and recruitment procedures by the institution’s top management.

MEC management is sacrificing Phiri in the damaging scandal , and they blaming the financial director of lacking leadership in the directorate of finance to discharge its functions accordingly and as required by law as well as international accounting standards.

“Following this unacceptable performance, the commission will constitute a disciplinary panel shortly to enable you to defend yourself against these charges,” read a letter seen by Nyasa Times, dated October 6 2015 titled Disciplinary Hearing signed by MEC deputy chief executive officer (CEO) Lellie Brian Longwe.

Phiri has expressed “suprise” with MEC for making him a sacrificial lamb when he has not been mentioned by the auditors in their report for wrong doing.

He said “ someone is really trying very hard to conceal the real findings of the auditors.”

Ministry of Finances said the audit was carried “because MEC’s large budget vis a vis the national budget posed a higher fiscal risk”.

On procurement, the auditors reported that they did not find evidence of a claim of payment for supply of goods by a Tanzanian company, SCI, amounting to K16.6 million; goods procured outside procurement plan and budget amounting to K40.6 million and procurement without Office of the Director of Public Procurement amounting to K526.6 million.

According to the executive summary of the audit report, MEC top management misused or failed to satisfactorily explain how about K1.5 billion ($2,727,272) was used on several activities.

Among the several queries include payments CEO Willie Kalonga paid to himself amounting to K2.2 million ($4000) for a personal trip to his private study graduation without the approval of the commission.

And that Kalonga operated a secret account at Malawi Savings Bank (MSB) which was used for suspected cashgate activities.

A special secret code named CEO Account at MSB opened in March 2014 number 1024883104001 was overdrawn by K8, 093,858.33 on 31/12/2014 in the bank while many transacts were not entered in the cashbook which was overdrawn by K33,819,387.69.

The abuse on the account cost the public K20, 634,732.20 in accumulated bank charges and interest which were also missing in the cashbook.

MEC chairperson Maxon Mbendera, who is also a judge of the Malawi Supreme Court of Appeal, was a recipient of the mysterious cash transfers which the management of the electoral body failed to produce documentation detailing purpose of payment.

Kalonga’s account received K37, 191,268.37 of the transfers between 14/07/2014 to 08/10/2014 with no proper accounting records and payments, the audit report reads.

“We have noted the observation and promise to make a thorough follow up to trace the documents to account for the transferred funds. We believe that weakness in recording and keeping of records might have caused the event,” MEC management defended their position when they responded to the audit query.

However, the audit report has recommended that the commission should be made answerable to Parliament on the use of the taxpayers money.

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