Final audit reveals ‘management fraud’ at Malawi Electoral Commission

A final investigative audit report that covers July 2012 to December 2014 now obtained by Nyasa Times issued on 4th August 2015 to the recipient of Dr Ronald Mangani, Secretary to the Treasury, has exposed fraud and expenses scandal at the Malawi Electoral Commission.

According to the report, MEC were heard and responded to the audit query.

The report indicates that MEC paid K5 million duty on two vehicles sold to its chairman, Justice Maxon Mbendera and chief elections officer Willie Kalonga, a move auditors described as an act of management fraud.

The transaction cheated the taxpayers by contravening a well laid out government guideline which states that since government vehicles are bought duty free, upon disposal the buyer pays duty to Malawi Revenue Authority before ownership can be transferred.

However, MEC management fraudulently used taxpayers money for personal gain of Justice Mbendera by paying the full duty of K2,436,875 for Toyota land  Cruiser Registration number TO2966 used by Mbendera; and K2,500,000 for another Toyota land cruiser registration number MJ3373 allocated to Kalonga.

MEC  responded by claiming that under Section 3 of the Act, it has the mandate to make its own policy on disposal of all assets under their ownership.

The explainationwas parried away by the auditors when they challenged MEC to produce evidence of government approval of such policy that allows duty to be paid by government agencies on behalf of employees.

“This is management fraud that defrauded  public funds for personal gains. Maintenance costs by MEC should be recovered from Justice Mbendera and Willie Kalonga,” charges the report.

The audit report recommends further that the two vehicles be surrendered so that an appropriate valuation as they are deemed to have been disposed off at very low prices.

MEC management acted to defraud taxpayers by repairing and servicing the two vehicles to a tune of K744,976.10 before disposal.

The report further blames Toyata Malawi for colluding with MEC management to defraud the taxpayers by significantly undervaluing the two vehicles.

“The audit team made an effort to enquire from Toyota Malawi, Blantyre in order to establish the cause of undervaluation which was below or almost equal to assessed repair cost (K1, 419,000 offered value K1, 500,000 for Mbendera and K396, 854 for Kalonga who paid K385, 000) but the official who signed the valuation forms deliberately avoided meeting the auditors,” reads the report.

MEC management claimed that the Board of Survey did not find any anomaly with the valuation and sale of the vehicles.

The stance by MEC drew a recommendation from the auditors to recommend that Anti-Corruption Bureau be invited in to investigate the conduct of valuation the two vehicles.

Exit discussions held between the auditors and MEC management on 15th July 2015 included:

Willie Kalonga – chief executive officer

Lilie Longwe – deputy chief executive officer

George Khaki – director of administration and human resources

Khumbo Phiri – director of finance

Geoffrey Mbawala – director of internal audit

Edington Chilapondwa – procurement manager

But MEC issued a statement on Monday after a Nyasa Times expose,  categorically denying the abuse of K1.6 billion funds by its officers but it instead blames the ministry of information for delaying communicating to the Internal Audit Department on matters MEC raised concerning the audit report.

In a statement following an investigative story published by Nyasa Times, MEC’s Director of Media and Public Relations Sangwani Mwafulirwa says the preliminary report had not taken into consideration responses by MEC management.

“MEC did submit its responses to the auditors in good time but due to communication breakdown in the Ministry of Information, the responses did not reach the auditors in time,” said Mwafulirwa.

He however should not tell the MEC response on the initial audit findings saying they are not meant for public consumption.

“Although there is high temptation to reveal the responses now in view of the damage the leaked preliminary report might cause, the Commission will restrain itself as doing so will be flouting audit procedures and ethics.”

Mwafulirwa said the Mbendera run Commission is appealing to the auditors and their auxiliaries to maintain their code of conduct and ethics by refraining from divulging “distorted information” to the media.

But final audit report concludes that ‘ “most allegations levelled against the chief elections officer [Willie Kalonga] are true.”

 

 

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