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Audit reveals K83.6 million CDF misused

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A recent audit into the handling of Constituency Development Fund (CDF) has revealed that funds amounting to K83.6 million were misused in local councils.

This was revealed in Lilongwe Tuesday when representatives from Treasury, led by Acting Chief Director for Economic Planning and Development, Peter Simbani, appeared before the Public Accounts Committee (Pac) of Parliament.

Simbani, who was accompanied by Director of Central Internal Audit, Dickson Chasambira, Deputy Budget Director, Levi Chirwa and Treasury spokesperson, Davis Saddo, said the audit was conducted in 16 councils in the 2016/17 financial year of which 14 were district councils and two were city councils.

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The district councils audited were for Chitipa, Karonga, Mbelwa, Nkhotakota, Dowa, Lilongwe, Ntcheu, Mangochi, Machinga, Chiradzulu, Nsanje, Mwanza and Neno while the city councils were Mzuzu and Lilongwe.

He said the audit covered transactions for the 2014/15 and 2015/16 financial years which had a total disbursement of K1.9 billion in the 16 councils.

“It was found that a total of K15.4 million was spent on ineligible expenditures in nine councils. This amount consisted of payments that were not allowed to be made from CDF Account as required by the revised CDF guidelines of June 2014.

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“The ministry found that the anomaly was mainly caused by the minimal involvement of District Commissioners in the implementation of CDF projects, as such, guidance on the same was not provided to honourable MPs or Area Development Committees (ADC) or Village Development Committees (VDC) who were dominating the implementation process,” Simbani said.

The audit further revealed that materials and labour services amounting to K44.2 million were procured for 33 projects that did not exist or the projects were being implemented by development partners and other government agencies in six councils.

It says the ministry found that the anomaly mainly happened because payments were processed without certification of the works done by the office of the Director of Public Works and the ADC/ VDC.

“Materials valued at K21.3 million for 30 projects were either not delivered, delivered in wrong specifications or with defects in eight councils.

“The ministry found that the anomaly was mainly caused by lack of segregation of duties especially in sourcing of quotations, handling and collecting materials which were often done by honourable Members of Parliament,” Simbani said.

The audit also revealed that K2.7 million was spent on nine projects with poor or unsatisfactory workmanship in three councils.

The audit also discovered that payments for CDF were sometimes made without completing the project application forms required by CDF guidelines which partly contributed to initiation of projects by MPs without knowledge of councils.

According to Simbani, the audit of the 16 local councils was extended to 13 more in subsequent two financial years, and that only three councils of Salima, Likoma and Blantyre District remain unaudited to date.

He said apart from addressing the audit findings, the government has been undertaking other initiatives aimed at improving management of CDF and, generally, public resources in councils.

Among others, Simbani said in the 2019/20 budget, a provision was made to recruit critical staff in local councils in order to improve staff capacity with the hope of improving management of public resources.

Pac Chairperson, Ken Kandodo, demanded that the Treasury officials should bring a detailed report of constituencies which had problems so that the committee appreciates the problem areas.

Kandodo said the committee will this week meet various stakeholders to get a clear picture on the operations of CDF.

“For a long time, there have been allegations of mismanagement of CDF by members of Parliament so we would like to get to the bottom of the matter,” Kandodo said.

He said there is need to ensure that public resources are properly managed.

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