PwC recommends further probe in K92bn Malawi cashgate: ‘Recover deleted database’

PricewaterhouseCoopers (PwC)Advisory Services who were working on methodologies on the reconstruction of the cashbook in the wake of audit query for the K92 billion (US$204.4 million) mismanaged under the watch of the first Democratic Progressive Party (DPP) administration led by former president the late Bingu wa Mutharika, have recommended comprehensive forensic audit.

Kamphasa: K92 billion audit query analysis will lead to forensic audit which will take approximately 10 months

Kamphasa: K92 billion audit query analysis will lead to forensic audit which will take approximately 10 months

In the 52-paged report to the National Audit Office of Malawi, PwC has called for further investigations   of ministries and departments covering the period between 2005 and 2012.

Director of PwC, Lionel Van Tonder said in the report seen by Nyasa Times that the content of the data analysis is for “information purposes only and may not form the basis of any criminal, civil, disciplinary or any other actions against any party/ies.”

The auditors recommended that the “variances” identified pertaining to the reconciliation of bank statement transactions to cashbook transactions need to be further investigated.

“The daily reconciliation performed on the Epicor system, matching electronically received bank statements to the previous day’s cashbook, needs to be reviewed. This is a potential control weakness and more comprehensive controls need to be architected to identify possible irregular transactions or ‘red flags’ as they occur,” reads part of the report recommendations.

PwC recommended that the variances of the number of transactions on the bank statement versus the number of payments on the cashbook be reviewed and that the daily reconciliation of cashbook to bank statement process also be reviewed.

“It should be considered to recover all deleted and/or modified database records in order to reconstruct the Cashbook [for the period following March 2010],” recommended PwC.

The auditors noted that the exercise will be “extremely lengthy and complex “as the Auditor General will have to work through millions of transaction logs to further understand the movements of the database.

“The complexity of this task justifies a separate submission which we will do if required,” PwC said in the report.

Identifying what they called “red flags”, PwC stated that suppliers and users created data on one day but deleted either the same day or deleted the following day.

They also pointed out that payments, vouchers and invoices were being created and deleted on the same day.

PwC states that the “anomalies should be further investigated to identify the extent of the suspected irregular transactions.”

Malawi’s Auditor General Steven Kampala said the released data analysis report is a first step towards a full forensic audit which would take approximately 10 months.

Kamphasa said the data analysis had identified discrepancies between payments made from government bank accounts and cashbook records held in the Integrated Financial Management Information System (Ifmis).

“From analysis alone it is not possible to establish exact amounts or causes of the discrepancies nor how many of these funds were misappropriated,” the Auditor General said.

Germany, one of the countries that suspended aid to Malawi after a massive public sector graft scandal in 2012 known as cashgate, granted Malawi  finances about K125 million to conduct the audit into what has been known as DPP-era cashgate

PwC continued from where British auditor Baker Tilly, who uncovered traces of cashgate, left.

‘Cashgate’ denotes the systematic skimming of millions of dollars of money from the government payment system.

Following the Cashgate revelations, donors withdrew aid and Malawi has been operating on a zero-aid budget, a situation that has caused misery to Malawians economically.

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54 thoughts on “PwC recommends further probe in K92bn Malawi cashgate: ‘Recover deleted database’”

  1. Kandapako says:

    Anakuuzani Muluzi kuti Bingu ndi economic engineer. Ndalama zinabedwa, kuti apeze amene anaba sizitheka, mapeto ake nkhani yonse ifela mmazila. Tingoiwalapo izi apa.

  2. mwahana says:

    One thing comes out clear on this saga.The PLUNDERING started when Goodall Gondwe (Mtumbuka, Finance & Economic specialist) was removed from Ministry of Finance and later dropped from cabinet and replaced by Ken Lipenga (Lhomwe, English specialist with no financial knowledge). This was a deliberately hatched scheme to steal by the Mulhakho gurus DPP. Pwc get into the forensic work asap, we want names.Malawians want to know who are the thieves/plunderers/ killers of innocent souls in this nation. By the way “WHERE IS DR KEN LIPENGA?????” I have some few questions for him!!!!!!

  3. GPMG says:

    In German development assistance accounts it will be reported that the equivalent of MWK125 million was given to Malawi for “promoting financial transparency” when in actual fact this money has been given to South African Boers working for PwC. It would not be so painful if some useful work had been done; but in this case so much money has been spent to tell us what we already knew: The fact that our public finance system was broken and was heavily plundered mainly by the DPP regime.

    This is the tragedy of being poor and powerless. You are first screwed by your own Government, then donors come in pretending to assist you while in reality they are screwing you for the second time. What a shame!

  4. Snoop says:

    As I said before, the so called K92 billion cashgate talk by opposition MP is simply HOT AIR. No basis, just barking like MAD dogs. Unfortunately, this is waht some misguided and digruntled Malawians want to hear. Political lies and envy at its best in our country!!!!!! Get a life.

  5. MAFUMU says:

    Akunama awo zonse taziwona kale PA BANTHU TIMES

    NKHANGA ZAWONA !! NKHANGA ZAWONA !!

  6. MALEPA says:

    PWC ARE LIKE A HUNGRY DOG UNDER GVT DINING TABLE,EXOPECT LIES AND WHAT THEY SAY IS UTRA NOSENSE,vuto ntchito yotenoyi akupereka ku boma kuti liyang’anire;”khoswe akakhala pamkhate sapheka”okuluokulu odatero,mbava izi wina ndiuja alikunja ujo ;solupitaukamutengabwa

  7. straight Talk says:

    There had been audit of the same 92b by the Mw gvt in 2011 thus where the root came, why having to be redone. In the first we were told Germanyhad allocated 9b for forensic audit of 92b which was called audit query. Now its account data which seems to have same descipances and you keep on hiding the report. Show the report to the nation. I believe the same Germany or any other donor will complete the work having establish anormalies they would want to find out who did this and that. Otherwise according to the statement above mwapanga zomwe timadziwa kale if u r telling the truth popeza sitikukhulupilirani agaru inu.

  8. BONDO says:

    Ukayenda ndi mlomwe wayenda wekha

  9. mussa says:

    mmmmmmmmmm dis z full of cashgate

  10. BONDO says:

    Iwe # 10 it is not govt money being used for the audit but Germany’s. Anzathu safuna kupanga tolerate impunity for the sake of posterity

  11. Yemwe Uja says:

    To me, what PWC conducted was simply Bank Reconciliation and I am not sure what their terms of reference were when they were engaged. There is total expectation gap here. What people were expecting is totally different from what PWC did.

  12. Charombanthu says:

    This is now getting interesting. What is the role of the Auditor General’s office if simple issues such as reconciliation of bank statements to the cash book are not checked regularly? Records/transactions are deleted from the system without reason? Discrepancies between payments made from government accounts (cheque books in this case) not agreeing with the cash books? I thought these matters are supposed to be checked by internal auditors, in this case, the Auditor General’s office on regular basis. Did we have to wait for PWC to uncover these anomalies. We have a very serious problem here and may be the K92 billion reported is a gross understatement of the actual amounts looted. The taxpayer has been duped……

  13. Malawi has had thugs running the country after Kamuzu. We need to break away from this team of southerners running Malawi.

  14. nyavizwazwa says:

    lina langokhala dyera tsono. cashgate yobedwa kale. PWC nawonso akufuna cashgate. Ndi chonchotu anthu akakhala mbutuma aliyense amawapezerela nkumadya masuku pamutu

  15. Patrick Phiri says:

    Nanga Ntata wanuyo mabodza ake amawatenga kuti?

  16. Cashgate says:

    Ken Msonda told the nation that the Financial Analysis Report had names in it which he knows. Where are the names here? Does it not vindicate what the Auditor General had been pronouncing here? Ken Msonda, game iyi Peter aiphelera, iwenso udziwa kuti Mlhomwe ndi Mlhomwe. Mark my words!

  17. chandi says:

    So Mr Kamphasa help us. I understand you are a learned person capable of transacting your duties without any political interference. Speed up the forescic auditing Malawians are eagerly waiting. But am sure just as Aristotle said every human being is political in nature, your political leaneage will determine the speed of the case. If you mess up with this information your days on the government payroll will negatively numbered. Take it or leave it.

  18. mulopwana says:

    who authorised them to conduct an audit analysis instead of the real audit work?We can’t be wasting time like this when the thieves are still in the cash box no..no..

  19. Ngalamayi says:

    The only way Malawi and its government can regain the trust of donors is if PwC are allowed to do a thorough job. Their findings must then be made public – and the opposition must push hard for this – and ALL those who helped themselves to public funds should end up punished, their property confiscated. When is the government going to start development work? All its attention seems to be on hiding the wrongdoing of some of its members! Malawi needs to move forward!

  20. Yonas says:

    Apanso a PwC angondyapo mfwefwe wa phee, ntchito yeni yeni sinagwilidwe. I might be a lay man in this field but truth be told and asked ” what were the terms of reference” for their engagement as Auditor on this financial scam. Iam pissed off and half-changed as this will go no where. Let us just forget the 92 Bn MK
    and look forward

  21. Nyau Isthobwa says:

    Mubise musabise nthawi ili mkudza zonse zidzaoneka mark my words

  22. Mavuto Pwiya~pwiya says:

    Apa ndiye kungowonjezera kuti ndallama za Boma zizingowonongeka popanda phindu chifukwa kumapeto kwache siziphula kanthu zizangofera muzira basi

  23. onjoya says:

    mcp mbuzi

  24. Kwatha says:

    Koma agalu amenewa dziko losauka ngati ili nkumatiberanso ndalama. Chauta awakanthe ndithu

  25. Charter says:

    Unimpressed. Nevertheless, two things are clear. 1) Hefty sums were stolen. 2) Theft occured during the DPP Bhingu-Petter regime. Why are donors paying money to uncover a simple truth that the same people in government today (Chaphonda, Ghondwe, etc) can simply say “we embezzled the money”? Malawians continue to show ourselves fools in allowing broad day-light thieves to govern us!

  26. When the profession becomes a liabilty

  27. Pwc just wasted their time, they have done nothing

  28. ***** Ugalu Bwako says:

    This is nosense. PwC auditors are doing bank reconciliations for the government yet the same government has the whole department of qualified accountants. Most disguisting

    Maybe, Lionel Van Tonder is not competent enough do the audit.I can foresee this man giving excuses that audit can not be concluded becuase information is not available. Stupid Auditors.

    Just arrest the people responsible for cashbooks or ledgers they will tell us why they deleted information.

    Is deleting information not a crime in Malawi????????!!!!!!!!!!

  29. CHEJALI says:

    Kkkkkkkk tiyeni nazoni a dpp.

  30. White Rabbit says:

    Baker Tilly and PwC.

    Thank you.

    With all my heart…Thank you.

    On behalf of the people of Malawi, those whom these stolen resources actually belong to, thank you.

    All the hospitals, schools, infrastructure which would have been built, all the lives which would have been saved with all these stolen resources. It makes me very sad that it was stolen from the people.

    Thank you. Keep up the good work.

  31. tumbuka of nyika says:

    Mwagwa nayo mumaona ngati iyi ndi audit report. Akuti siinatchule zina la munthu. Sopano inu mumati dzina la mfumu latchulidwa mumalota eti?

  32. BISM says:

    This is not impressive… we understand there was already an audit before which brought up the figure of MK92 Billion, and this report is believed to have been swept under the carpet! Why not pick up from the old report and proceed?

  33. mphwache wa bingu says:

    Inu a PwC mungofuna ntchito nanga nthawi yonseyija mumatani. I thought you were doing forensic audit kumene and you recommend the same thing. Just tell us kuti you foun nothing andstop wasting our time.

  34. Kizito says:

    Either Allan Mtata is a misguided investigative journalist or this report is fake. and a whole bunch of idiotic opposition parliamentarians bought into the lies orchastrated by a young man living abroad to the point of frustrating budget discusions. We sure are unfortunate to have these ppo for our parliamentarians. Even the seemingly educated Jessy Kabwila basi makani ndi maphunziro anu a ziyankhulo aja mafigure amenwwa muwatsata? Where are the names you were looking for? The AG said it clearly that report is of no value at this point in time koma makani. Kaya bwana Menyani muti bwanji kumeneko.

  35. Vehtekhu says:

    Ogooo ineee! Kunena kwa ndithendithe a Ibrahim Matola anazitengera

  36. Professor Seyani says:

    Dont play with Malawians. Our living God will punish you who are taking Malawians for granted. Malawians have been duped and taken for a ride for so long. Dont think that God isnt watching this. Fu…….k you

  37. The real Ujeni says:

    Since payment vouchers and invoices were created and deleted same day, my advice to Auditors is to start from the opposite direction- Human Resources department. Get the Starters and Leavers files analyse them. Find out who was manning the concerned stations during the period concerned.

    I would assume some of the staff concerned resigned after accumulating some wealth. Some left the country too.

  38. Joburg CBD says:

    Zanziii!..

  39. captain says:

    Why recommended this auditor generals department to do the work yet he is a puppet also. Why u PwC can’t do urself , i thought u were funded for that

  40. mwanamulanje says:

    zina kambu zina leku, DPP ikuyesesa, kuyendetsa boma la Malawi wth zero-aid budget si zamasewera akuruakuru tivomereze! yet sikuti economy yacita kuipiratu ayi, bravo!

  41. That is completely bullshit.So you want to just “eat” money?All that K7.9 billion was not enough.I now doubt the credibility of PwC.That money was just more than enough to finalise everything.PwC and NAO must be audited too.Thieves!

  42. Hoitty says:

    Ma auditor ake anali a Malawi? No wonder zili chonchi. Bwanji a Germany osabweretsa a Baker Tilly anu? Tiziti zimenezi mzomwe boma limakanika kutulutsa poyera?

  43. Hoitty says:

    Ma auditor ake anali a Malawi? No wonder zili chonchi. Bwanji a Germany osabweretsa a Baker Tilly anu?

  44. muthu muoneke says:

    So this is preliminary report koma petulo uyu!

  45. ditto says:

    The most difficult time to be Auditor General ! I don’t envy Kamphasa’s position right now ….

  46. Thomas brian says:

    Malawi has a political rotten society of leaders, full of gross indiscipline, corruption, theft, selfishness, greed, that every arm of the government fails to operate, manuover, or make any progress. how can you get clean wine out of a dirty bottle ? God have mercy on malawi they are innocent people that are suffering because of a few bandwagon of thieves.

  47. Mashall says:

    Am forced to believe that the job is too big for these auditors

    How long have you been working on this matter (analysis ) ???

    How much money have you used so far whether from within or funded ???

    I think you need the assistance of British Baker Tilley

    IF OUR COUNTRY IS TO DEVELOP WE NEED PEOPLE WHO CAN BE DOING THINGS ONCE AND FOR ALL NOT DOING THE SAME THING OVER AND OVER AGAIN

    PLEASE BE SERIOUS WHEN DOING THINGS OF NATIONAL IMPORTANCE

  48. Kachindamoto says:

    There goes donor confidence

  49. Zoni says:

    Iwe Ntata ndiye ndipati amutchula Mutharika???eeeee??Kusuta basi!

  50. ngoni wachi tonga says:

    We can talk and talk on these issue but the truth shall remain the same that cashgates then corruption or fraud sometimes known as kusolola is the brainchild of one believed by some quarters as the father and founder of democracy Muluzi.Thats why this Mafias will do everything possible within their power to rule this nation in the contest of democracy by using different names from UDF,DPP or PP.They are the same people with common interest to enrich themselves.As long as they are in power cases of these nature will go nowhere,waist of resources and time.Hopefully one day God will judge and destroy everyone involved.

  51. Mr Dambwe says:

    Ntata Upenga chaka Chino….Ngati Chili Chamba Ndi Kwa Bwino Kongochisiya Usanafike Pomvula Kabudula.

    Malingizo Ndiye Ndi Aulere Uzinyozera Wekha.

  52. Abk says:

    So the comprehensive audit is not yet done. why do we demand the immediate release of the report before parliament? politics of hatred!

  53. DEMOCRACY says:

    I have lost trust in this investigation. Instead of giving us names, you change the tune that it was a data analysis exercise. You take Malawians for granted. You have spent MK125 million for this mediocre work. Are you not ashamed. And you are saying the forensic report will take 9 months, how much are you going to spend when you suspend budget support and we dont have drugs in the hospitals and people are dying from curable diseases. we are tired of this trash

  54. Pata phiri says:

    So what the hell you did on the first as u asking for comprehensive audit which means the first one was like a headless chicken audit or u r also involved in the cash gate
    God save nyasaland

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