Two special audit reports, one spanning a two-year period ending June 30, 2020 and another specifically targeting an incident in Chitipa District have revealed financial irregularities at Malawi Electoral Commission (Mec) that might lead to loss of billions of kwacha, The Daily Times can reveal.
The reports that were issued in September 2020 indicate that Mec during the audited period made payments and procurements that did not follow procedures including paying inappropriate rates of subsistence allowances, paying overlapping subsistence allowances, paying inflated prices, paying external travel without evidence of travel and mischarged expenditure.
The audits also found Mec paid full amounts for goods that were partially delivered or not delivered at all, goods delivered without Internal Procurement and Disposal Committee (IPDC) approvals; some procurements were made without involvement of IPDC, some bid evaluation reports were not available, and failure to solicit three quotations.
One report that was prepared by Mec’s Director of Internal Audit Geoffrey Mbawala found that the commission during the period of investigation repeatedly violated a government circular reference number HRM/ALL/01 dated December 6, 2019 pertaining to subsistence allowances, the Public Finance Management Act, Treasury Instruction Finance, on payment procedures to suppliers and the Public Procurement and Disposal of Public Assets Act.
The audits revealed that from October 9 to 22, 2019 two Mec staff on four occasions were paid subsistence allowances to attend court proceedings using an inappropriate rate. Apparently, one of the members was paid K960,000 for 16 nights when the correct rate for that period was K720,000.
“As such, in this instance, this makes a difference of K240,000 that the commission is expected to refund. However, the total amount to be refunded is adding up to K807,500,” reads the report in part.
It also noted that in the violation of the Public Finance Management Act, Mec made a total payment of K63.7 million to drama groups using inappropriate rate of subsistence; subsistence allowances worth K1.1 million had dates overlapping and suspicious inflated prices on procurement leading to an overpayment of K33.6 million in total.
The report also queried the payment of K6.7 million to a commissioner to cushion loss suffered during post-election demonstrations without a basis.
“Commissioner Reverend Killion Mgawi paid on cheque number 15739 as compensation to cushion him for the loss he suffered during post-2019 elections demonstrations.
“The Commission, through a resolution dated August 2, 2019, directed that Commissioner Mgawi be paid a sum of K6,750, 000, equivalent to 90 days, at the rate of DSA provided under the terms and conditions of service. A payment of K5,099, 614 was made in form of air tickets for the commissioner and his wife while the balance K1,650, 386 was paid directly to the commissioner by cheque,” reads the report.
The audit also pointed out some discrepancy between quantities indicated on invoices and quantities indicated on delivery notes which shows that a total amount of K57.9 million was paid without goods being delivered.
It also shows that a cheque was debited twice by the bank as K495,000 and K624,000.
It was also revealed that goods worth K46.6 million were delivered prior to IPDC meeting authorising the procurement while a procurement worth a total of K84.8 million was paid for with no attachment of IPDC minutes and procurement worth K445.3 million was paid without bid evaluation reports.
The report farther indicated that from December 11, 2019 to 30 June 2020, the commission made different payments based on inflated prices. For instance, the commission bought 500 boxes of mouth masks at K48,000 per box and 10 brooms at about K6,000 each.
The report went on to state that Mec made full payments to different companies for partial or no deliveries at all. For instance, K13.1 million was spent on 1,500 gloves, 180 suits and 180 boots that were delivered, 240 ream A4 photocopying papers at K66 million and as well as 500 similar papers from a different companies at K22.8 million were also not delivered.
Meanwhile the report on Audit Committee investigations on supplementary fuel to Chitipa found that Chitipa District Elections Clerk (DEC) Gabriel Zambasa fraudulently initiated a transaction for 17,300 supplementary litres of fuel for polling activities of the 2020 fresh presidential election in Chitipa District on 24 June amounting to K11.5 million.
The report also found that Mec Senior Electoral Services Officer, Logistics, Fyson Magalasi added 2,300 litres of fuel which was not originally requested by Chitipa DEC and that Mount Meru Limited allowed encashment of unutilised fuel by the DEC instead of paying back the balance to MEC which is unprocedural.
“It was confirmed that this transaction was actually fraudulent. In initiating this transaction, the internal auditor present at the District working with the District Elections Clerk was bypassed to confirm the illegitimacy of the transaction,” reads the report.
It further recommended that the DEC should be reported to Police for fraud and that police should investigate the entire transaction and those who may have benefitted in the transaction including Meru Chitipa staff be interrogated.
Mec Spokesperson Sangwani Mwafulirwa told The Daily Times that the commission did not want to speak on the issue because the audit is apparently ongoing.