Whatever flies up must come down. And they say be nice to people on your way up because you will need them on your down.
The Democratic Progressive Party (DPP) grew wings and flew up and it is now coming down. On its way down, it is now in need of the people that it plundered their economy; the people whose sons it killed on July 20 2011; the people it made spend nights in fuel queues at filling stations for gas scarcity created deliberately. The party needs these people to vote for the plunderers again into government. Malawians are better judges.
But God loves this country. The creator has revealed to Malawians how the party and its former leader and the country’s late president Bingu wa Mutharika siphoned billions of Kwacha from the state through their creation of a system called the Integrated Financial Management System (Ifmis).
The DPP presided over the loss or mismanagement of over K90 billion through Ifmis abuse between 2009 and 2012 through IFMIS. The regime under the late Bingu wa Mutharika was warned several times that IFMIS was being abused to siphon billions of kwachas, but it did nothing.
Then the authorities instructed commercial banks at the time that no government cheque should be returned to drawer and that created more room for abuse.
National Audit Office interim investigative audit report of Ifmis between 2011 and 2012 gives details of how commercial banks misbehaved.
“The current arrangement was that a consortium of three commercial banks namely NBS Bank, Standard Bank and Malawi Savings Bank were the authorized banks to honour all government cheques from any of their branches for any amount without any limit on behalf of the Reserve Bank of Malawi.
“For example, on Malawi Police Service account, cheque number 154424 dated 30/09/10 was cashed for staff with an amount of K500 000 000.00. The role of the RBM was simply to refund all what was disbursed by the commercial banks without control mechanism.”
Independent observers say had government acted at the time, the current scandal could have been averted. The observers also say the Joyce Banda administration was bequeathed a stinky mess and must be commended as well as supported for the bold cleansing steps it has taken.
Where did things go wrong? During the days of the cash-budget in the 1990s, government used to have Credit Ceiling Authorities (CCAs) to limit the extent of payments and check excesses. But CCAs stopped in 2005 when government rolled out the Integrated Financial Management and Information System (IFMIS)). That was during the Mutharika administration. That was also the year Mutharika dumped the United Democratic Front, the party that sponsored him into government and formed his DPP.
The absence of CCAs may have left room for siphoning limitless sums of money even when no goods and/or services were ever delivered. Authorities’ instruction to commercial banks to honour all government cheques from any of their branches for any amount without any limit worsened situation.
There are two reports—one from an independent assessment by consultants McCarthy Phiri and Richard Chisala jnr who investigated weaknesses in IFMIS (Office of the President and Cabinet commissioned in 2009) and a-Treasury sanctioned investigative audit by the National Audit Office (NAO).
Both found massive loopholes in the EPICOR-supported system. Both reports strongly recommended immediate redress, but nothing happened.
Among the serious weaknesses that the Phiri-Chisala assessment made were the following:
- .The IFMIS project did not have a legally-binding contract (it was not signed).
- .The supplier, Soft-Tech Consultants, did not fulfill their contractual obligations as the system was partially delivered with only four functional modules of the complete financials suite government fully paid for.
- .Since there was no contract, government could not take the supplier to task for supplying four instead of nine modules. Unfortunately, the modules that were not delivered were the most crucial that could have helped in proper tracking of Government resources.
- .IFMIS does not have any alert system to detect any fraudulent activities or any deviations to normal operations within the system such as overriding system controls without appropriate approval process and any system performance issues let alone a functional audit trail to track system usage.
On the other hand, the 2011 NAO interim investigative audit made the following recommendations that were also ignored:
- .IFMIS should be reorganized by putting in place strong internal checks and control with immediate effect.
- .The systems requirements and procedures should be reinforced with capable supervision.
- Further investigations should be conducted by special teams on the areas suspected that public resources may have been lost or mismanaged.
The lack of political will in the DPP administration to deal with these weaknesses is the major factor that led to what is now being called cash-gate.
While the Joyce Banda administration does not want to engage in a blame game and is focusing on dealing with this unfortunate fiscal crisis as quickly as possible, it is important for citizens, Civil Society and the international community to appreciate that looters found a friend in the previous administration, which despite being strongly advised to deal with the weaknesses in the system, it paid a blind eye.
This led to the loss of huge amounts of taxpayers and donor money.
When the Banda administration came in and its attention was drawn to these reports, the current President summoned the Minister of Finance Dr. Ken Lipenga way before the cash revelations and directed him to come up with a plan for dealing with the pilferage.
President Banda has also demonstrated strong political will and personal commitment not just to fix IFMIS, but also stamp out fraud and corruption in government once and for all.
It is encouraging to hear from President Joyce Banda that she will not shield anybody be it her realtions.Follow and Subscribe Nyasa TV :