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Auditor General queries K183 billion

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By Taonga Sabola

A report by the Auditor General (AG) on government accounts for the year ended June 2020 has raised red flags on transactions amounting to K183 billion by government ministries, departments and agencies (MDAs).

The queries are K148 billion more than the irregularity of K35 billion recorded in the year ended June 2019.

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The irregularities flagged by the report include revenue collected by the Malawi Revenue Authority (MRA) not being recorded in the Integrated Financial Management System (Ifmis), payment vouchers not being provided for audit inspection, compensation payments being made without sufficient proof of loss and failure to account for outward transfers.

Other queries highlighted by acting AG Thomas Makiwa include contracts not being vetted by the Government Contracting Unit (GCU) and Ministry of Justice, payment of arrears without the AG’s certificate, failure to prepare bank reconciliation, funds transfer for referral medical cases abroad not being liquidated and failure to recover loans.

The report has also queried Capital Hill for not including public debt amounting to K3.817 trillion as part of the Statement of Financial Position (SFP).

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According to Makiwa, the financial reporting framework currently in operation requires the inclusion of financial assets and financial liabilities in SFP.

“However, there has only been a disclosure of the current portion of government debt, both domestic and foreign. As the government progresses towards full accruals, this should be an area for improvement,” Makiwa says.

Topping the list of queries spotted by the report is a K113.75 billion collected by MRA officials but not recorded in the Ifmis.

Second on the list of irregularities is the issue of K18.706 billion payment vouchers not being provided for audit inspection and K11.48 billion compensation payments being made without sufficient proof of loss.

Other irregularities highlighted in the report are failure to account for outward transfers as well as those pertaining to K8.909 billion and K7.78 billion contracts not being vetted by GCU.

“Irregularities with values between K50 million and K500 million, with a total value of K 2 , 762, 293, 152.46, include: Purchase of drugs from private suppliers without a waiver from Central Medical Stores Trust, stores not [being] accounted for, visa revenue collected by embassies not [being] accounted for, misallocations of expenditure, activity reports not [being] submitted for audit inspection and procurement using single sourcing.

“[Irregularities also include] long outstanding receivables, long outstanding debts, uneconomical use of resources, revenue spent at source, revenue not accounted for, funds not [being] liquidated, single-sourcing, general receipt books not [being] recorded in the security document register and abuse of funds for Malawi Digital Broadcasting Network,” the report says.

Finance Minister Felix Mlusu recently laid the report on the table in Parliament and referred it to the Public Accounts Committee (Pac) for scrutiny.

Pac Chairperson Shadric Namalomba was not immediately available to indicate when committee members would meet to scrutinise the report.

Centre for Research and Consultancy Director Milward Tobias said it was worrying that most of the audit issues keep on recurring year-in-year-out.

Tobias called for strengthening of the chain of command by, among other things, “ensuring that there are strong sanctions and rewards” for people involved in Public Finance Management.

He said, sometimes, people who have been responsible for too many audit queries were being, surprisingly, promoted in government MDAs.

Centre for Social Accountability and Transparency Executive Director Willy Kambwandira described the trend as worrisome.

“It is sad that the country is not improving in terms of prudence in the management of public funds.

“If anything, we are just getting worse. In our view, these are some of the tactics of swindling public funds. The revelations call for the need to strengthen the role of

Parliament in terms of time accorded to scrutinise the budget and expenditure, and also expertise in conducting budget and expenditure analyses,” Kambwandira said.

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