Audit reveals K35bn plunder: Malawi govt asked act on errant controlling officers

Malawi government has been asked to take “drastic action” against errant controlling officers at Capital Hill, for fear that public funds will continue going down the  drain following  revelations that K35 billion has not been accounted for and was probably stolen in ministries, departments and agencies (MDAs) in the 2018/19 fiscal year alone.

The National Audit Office (NAO) has produced an audit report of the Malawi Government accounts for the Year Ended 30th June 2019 submitted to the Office of the Speaker with a covering letter from Acting Auditor General Thomas Makiwa dated January 21 2020.

The K35 billion represents a whopping 1 066 percent increase from the unaccounted for K3 billion in the previous financial year.

In its extended coverage of the report which Minister of Finance, Economic Planning and Development Joseph Mwanamvekha, who formally presented the report in Parliament on February 19 202, Malawi’s leading daily newspaper, The Nation, used the editorial comment to  state that “finance prudence  demands action.”

The paper pointed out that the audit of the public finance management at Capital Hill “does not inspire an iota of confidence.”

Reads the comment in part:” Impunity and disregard for accountability in public finance management emanate from the laxity by authorities to bring to book controlling officers and their staff who give taxpayers a raw deal.”

The Public Finance Management Act and Public Audit Act impose punishments for errant controlling officers, but the paper noted that, since their enactment back in 2003, no controlling officer has been brought to book for overspending or non-accountability.

“Time to act is now,” the editorial comment said.

In an executive summary of the report, acting Auditor General Makiwa observes that the main findings from the audit, which account for 98 percent of the irregularities by value, include non-maintenance of non-current assets register, misallocations of public funds, fuel not recorded/not signed for in register/logbook, revenue spent at source, payment vouchers not provided for audit inspection, revenue not acknowledged by receipts and stores items paid for but not delivered.

Makiwa also reports suspicious long-outstanding pensioners, failure to maintain proper revenue accounting records, funds transfer for referral medical cases abroad not liquidated, stores items not traced to the ledger, under collection of revenue, unfinished construction works, lack of sustainable special budget for PhD scholarships, interbank transfers without supporting documentation, unsettled claims, payments made without adequate supporting documents, and delay in paying contractors.

The report has categorised the valued irregularities into three, notably major findings by value at K35 148 879 433.80, other significant irregularities by value at K652 649 865.85 and other isolated irregularities by value K148 347 622.47.

The document also notes that there are other areas of non-compliance, but not valued. These include works not done according to contract specifications, non-preparation of bank reconciliation statements, failure to implement construction projects, failure to prepare and maintain fixed asset register, failure to insure assets, failure to produce integrated financial management information system (Ifmis) cashbook and other reports as well as failure to prepare procurement plan.

In terms of value, the K35 billion it is enough to fund the forthcoming fresh presidential election the High Court of Malawi sitting as the Constitutional Court ordered within 150 days from February 3. In the Mid-Year Budget Review, Parliament approved a K29 billion funding for the fresh poll.

The missing funds are also enough to fund the entire Ministry of Gender, Children, Disability and Social Welfare (Vote 320) whose revised budget is pegged at K34.7 billion in the 2019/20 National Budget.

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