Global Funds demands back K394 million from Malawi

Malawi Government, which is currently struggling to balance up its books and come up with a workable 2014/2015 national budget, is yet again in another fix after the Global Fund to fight Aids, Tuberculosis and Malaria has written the administration demanding it to pay back US$937,905 (almost K394 million).

The money is an outstanding installment of US$3,994,764 (almost K1.8 billion) which an audit carried out by the Office of the Inspector General (OIG) of the Global Found discovered in 2010 to have been abused out of the funds disbursed for rounds 1, 2, 5, 7 of the fund’s assistance covering a seven-year period.

The outstanding payment was due on March 31, 2014 and is one of the three requirements for Malawi to access additional funding amounting to US$574.3 million from the Global Fund under a new funding model.

Gondwe:  Received letter from Global Fund  for Malawi to pay
Gondwe: Received letter from Global Fund for Malawi to pay

In a letter from Global Fund to the country’s Minister of Finance Goodall Gondwe dated July 8, 2014, the Fund revealed that the other requirement for Malawi to access the new funds is an official; commitment from the government to meet counterpart financing of five percent in the next three years.

“Furthermore, the access to this allocation is subject to the fulfillment of the following financial requirement: the payment of outstanding installment of US$937,905.27,” reads part of the letter signed by Senior Global Fund Portfolio Manager Plaikessi Kouadjani.

The audit carried out between July 1 and September 10, 2010 found out that Malawi could not account for the said amount as the transaction was ineligible or not adequately supported with documentation.

Malawi has been repaying the money since 2012.

At the time of the audit the explanation was documents were lost in the course of changing offices and there was no time for physical verification of vehicles which the audit observed were bought outside agreed work plan.

Ministry of Finance spokesperson Nations Msowoya in an interview said Malawi Government has since responded to the letter by asking more time.

“We have agreed with the repayment plan but we are waiting for the main budget which is due in Septemeber,” he said.

Apart from the two requirements, Global Fund has also asked for Malawi Government’s commitment to increase its current funding towards HIV and Aids, tuberculosis and malaria in order to access 15 percent of the allocation.

Malawi Government currently grappling with the task of coming up with its national budget following a decision by its partners not to support the national fiscal plan.

The development has forced government to look towards punitive tax measures in a bid to close the huge budget deficit gaps.

Recently Gondwe announced that the 2014/2015 budget is expected to be pegged at K743 Billion (US$1 790 361 446) but admitted that the budget is likely to face challenges due to the aid suspension.

Already Gondwe had a rude awakening when the donors turned back his begging bowl for support of almost K200 billion towards the health sector which is one of the sectors to be affected by the budget constraints.

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