90 percent of K577bn Cashgate squandered during PP era – Auditor General report
A forensic audit report by the Auditor General on the K577 billion (about $856 million) plunder of public money between 2009 and 2014 has exposed former ruling Peoples Party ( PP) as the main culprit in the plunder of more than 90 percent of that figure.
PP came into power as default government in 2012 when president Bingu wa Mutharika died in office. The following 24 months was characterized by wanton stealing of public funds through a process dubbed Cashgate.
The Auditor General’s report shows that hundreds of payments without supporting documentation were made from Capital Hill to PP politicians and close associates of immediate-past president Joyce Banda.
Most of the money was channeled to the party’s campaign activities towards the 2014 General Election preparations.
The report has diagnosed close to K555 billion that was siphoned out from the public purse between 2012 and 2014.
So far close to 10 people have already been convicted and all have testified how the then country’s leadership used them only to dump them when everything was exposed in the aftermath of Paul Mphwiyo’s shooting.
Over the past weeks PP parliamentarian Kamlepo Kalua has been pushing Auditor General Stevenson Kamphasa to release names of the people in the report which the opposition had all along claimed it implicates ruling DPP members.
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.
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