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Audit finds abuse of students loans

K1.1 billion disbursed dubiously

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Steven Kayuni

An investigative audit report at Higher Education Students Loans and Grants Board (HESLGB) has revealed massive plunder of university students’ loans between the 2019-20 academic year.

The board’s executive director Prince Phwetekere has confirmed that the organisation instituted the audit and that results were submitted to the office of the Attorney General (AG) for action.

“Ask the AG’s office for more information,” Phwetekere said.

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While the AG could not immediately comment on the issue, Director of Public Prosecutions (DPP) Steve Kayuni confirmed that they have engaged investigators, led by Inspector General (IG) of the Malawi Police Service Merlyn Yolamu, to look into the matter.

He said the investigators will act based on audit recommendations, adding that those found in the wrong will have to account for their actions.

“Right to education is enshrined in the Republican Constitution. Stifling it offends all dictates of development and public trust,” Kayuni said.

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The report indicates that, out of K1.3 billion that was disbursed by HESLB, K1.1 billion was disbursed dubiously.

The wasted resources represent 90 percent of the amount that poor students were supposed to get.

The report further indicates that 14 percent was irregularly claimed by universities between 2018 and 2019.

The report uncovers that one unregistered university [name withheld] benefitted from the suspicious payments.

The report states that K590 million was given to the university in question during the time it was not yet registered.

According to Section 24(a) of the HESLGB Act, 2015, students registered at the university were ineligible for the loans because the university was not yet accredited.

On top of that, the amount paid to students at the then-unaccredited university was comparably higher, at K890,000 per semester, than the amount that was supposed to be paid to universities in the same band.

This shows that not simply was the amount collected dubiously but it was also inflated.

In 2018-19, the university in question claimed an amount of K460 million.

Meanwhile, Scotland-based economist Velli Nyirongo has said that this is saddening news.

“There are students out there who dropped out because of university tuition fees while others are plundering the resources allocated to them. There are parents who have been gutted because they couldn’t send their bright children to university”, said Nyirongo

According to Nyirongo, incidents like this not only deny the present generation of students their God-given right to education but also future students because the student loan fund is supposed to be a revolving fund.

“The question is now who will pay for these lost funds, with interest, and considering inflation? Will the responsible people be brought to justice?” Nyirongo queried.

Economic analyst Betchani Tchereni said it is disappointing to hear about this

“I have seen students failing to realise their dream simply because they lack fees, yet some people happily plundered those resources. This is evil at its highest level,” Tcheleni said.

He said the resources could be used to do a number of things like putting up a number of factories and employing even more people.

He said it is important to have the law take its course, adding that this is the type of plunder that has contributed to economic upheavals we are seeing now.

The audit recommends that the board of directors and management should consider referring the matter to the office of AG for further investigation on fraud and money laundering.

“The board of directors and management should consider engaging the National Council for High Education and the Ministry of Education to explore how universities that engage in fraudulent activities should be handled,” audit report recommendations read.

In July, Malawi Police Service officers arrested HESLGB Loans and Grants Manager Chimwemwe Kaphagawani and Communications Manager Success Sikwese over the alleged theft of about K335 million meant for students’ loans.

The two were charged with theft by public servant.

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