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Fraud control project in vain, winds up in June 2016

The World Bank says a US$19 million project it started financing in 2013 to help the Malawi government improve financial management systems and address re-occurrence of cashgate has failed to achieve its objectives six months before its conclusion in June 2016.

In a periodic Implementation Status Results report dated December 31, 2015 on the Financial Reporting and Oversight Improvement Project (FROIP) posted on its website, the World Bank says a recent review of the project has found progress towards achieving its overall objectives to be unsatisfactory.

“Some activities such as capacity building, [and] procurement of works, goods and services) are progressing well but the key pillars of PFM [Public Financial Management] are not strong enough- especially cash management, commitment controls, debt management, payroll management, and financial reporting,” reads the report, in part.

It says that although the overall project disbursement rate is now at 47 percent of total commitment, the only remaining key expenditure line of the project is procurement of a new Integrated Financial Management Information System (IFMIS).

“If the procurement and payment for the new IFMIS are completed, disbursement may be very close to 100 percent,” says the World Bank, in the report.

“The relatively high disbursement rates compared to progress towards strengthening Public Financial Management shows relatively less appetite for strengthening the control environment,” reads the report.

“In other words procurement of new IFMIS software, hardware and Government Wide Area Network will not result in achieving an improved public financial management if compliance with the rules and regulations or managerial accountability are not enforced,” says the World Bank, in the report.

The main objective of the project was to improve internal controls, accounting, reporting and oversight of government finances at the central and decentralised levels in ministries, departments and agencies in Malawi.

The Implementation Status Results report was compiled after an implementation support mission conducted from July 20 to 31 under a Mid-Term Review (MTR) of the project from August 31 to September 14, 2015 and that this was done by officials from the World Bank together with Project Secretariat staff at the Ministry of Finance.

The team observed that the project’s objectives remain relevant today as it was at the inception of the project.

“The recent ‘cashgate’ scandal highlighted the immediate need to address the long-lasting public financial management problems,” reads the report.

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