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Audit exposes Mec CEO bank account flaws

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By Jameson Chauluka:

MWAFULIRWA—All this was appropriately responded to the auditors

Auditor General’s report for the financial year ending June 30 2017 has shown that Malawi Electoral Commission (Mec) has been violating operational guidelines of the Chief Elections Officer Account, whose actual name and use has come under scrutiny.

The audit report signed by the then auditor general, Stephenson Kamphasa, highlights anomalies in the way Mec has been transacting with the account which was opened to ease the way the commission conducts its businesses.

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An audit of the financial statements for the financial year ending June 30 2017 was completed in February 2018.

The audit report was presented to the then Speaker of the National Assembly for tabling on May 4 2018.

“Treasury instruction number 5.7.3.6 states that no bank account shall be operated for the deposit or withdrawal of public money without the express authority of, and on such conditions, as the Secretary to the Treasury determines. An inspection of payments records and other correspondences disclosed that Malawi Electoral Commission on 7th November 2016 instructed FDH Bank to transfer an amount of K8,690,125.16 from the Chief Elections Officer’s account number 1024883104001 to FDH Administration suspense account for undisclosed activities,” the audit reads in part.

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The report further notes that although the Secretary to the Treasury gave Mec the nod to open an operating current account with a commercial bank of their choice in the name of Chief Elections Officer so that no open cheque above K500,000 could be enchashed over the counter, such cheques were still being encashed over the counter.

“Contrary to the provisions of the stated circular, the audit inspection observed the following irregularities…an inspection of the cashbooks and cheque counterfoils disclosed that 42 cheques amounting to K110,090,269.50 exceeded the encashment limit of K500,000.00 [and] were encashed over the counter.

“Further, a total amount of K96,795,613.32 was paid to various suppliers of goods and services from the Chief Elections [Officers]’s Account other than from ORT Account,” the statement reads.

Mec spokesperson, Sangwani Mwafulirwa, Wednesday said the commission was aware of the issues that the preliminary audit report raised and that the commission gave its responses.

He said Mec provided its responses with supporting evidence to the auditors, adding that the auditors cleared these queries and dropped them.

“The amounts above K500,000 were drawn from the Chief Elections Officer account which was created with authorisation from the Secretary to the Treasury to facilitate such payments. The circular referred to forbids processing government open- 3-cheques that can be cashed over the counter which are above K500,000 in the Ifmis. The work of the commission often requires cash payments in excess of this ceiling. All this was appropriately responded to the auditors,” Mwafulirwa said.

The issue of Mec CEO Account hit headlines on Monday when The Daily Times published a story disclosing that Treasury deposited K4 billion into the said account on the eve of the May 21 Tripartite Elections.

Human rights activists and Malawi Congress Party said they had reservations with the timing of such transaction and wondered why, of all the names, Mec named its account CEO, saying such a move was against corporate governance principles.

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