PricewaterhouseCoopers to audit cashgate in Bingu’s era

PricewaterhouseCoopers (PwC), the world’s biggest accounting firm is expected to conduct comprehensive forensic audit of ministries and departments covering the period between 2005 and 2012.

The new forensic auditor according to treasury spokesperson, Nations Msowoya, would continue 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.

Germany, one of the countries that suspended aid to Malawi after a massive public sector graft scandal, has granted Malawi  $25-million  (K9.76 billion) to conduct the audit.

PwC were earlier on reported would conduct an audit into the fraud of government funds in a period between 2009
and 2012.

But Msowoya said the auditor’s scope of work would cover from 2005 to 2012, a period when Malawi was under late President Bingu wa Mutharika who died while in office due to cardiac arrest.

“Price Waterhouse Cooper International is the firm we have identified to conduct the forensic audit.  They will start from 2005 to where Baker Tilly left,” said Msowoya.

He said the new auditor would focus on budgetary allocations and expenditures to all government departments and ministries following reports of massive fraud.

British auditors, Baker Tilly, commissioned by former president Joyce Banda, showed that 13 billion Malawi Kwacha (about US $30 million) had been systematically skimmed from the government payment system in a period of six months last year.

But the Anti Corruption Bureau (ACB) says roughly K20 billion was stolen and it reported K90 billion also went missing over the eight years of late Mutharika’s presidency , equal to roughly $500m at the exchange rate of the time.

In total about 30 per cent of the country’s budget could have been looted over a decade – almost as much as donors have provided Malawi over the same period.

The scandal, dubbed “Cashgate”, prompted foreign donors – who provide around 40% of Malawi’s budget – to pull the plug on aid.

A number of government officials implicated in the fraud are facing criminal charges and a first official Treza Namathanga Senzani was jailed last month for three years over the scandal and last week former Accounts Assistant in government Victor Sithole was also convicted.

More arrests of suspects will be carried, according to ACB and government.