A report by the Auditor General for the 2015/16 financial year has revealed that the government lost K4.4 billion due to weaknesses in financial and internal controls.
To put the loss in context, K4.4 billion would have been sufficient to build two community day secondary schools or three health centres in hard-to-reach areas.
The financial statements of the votes for the financial year ending June 30, 2016— which were submitted to the Speaker of the National Assembly through the Minister of Finance, Economic Planning and Development, Goodall Gondwe, represents 68 percent of total voted expenditure and budget.
The report has revealed that the National Assembly spent K11 million on airtime that was not accounted for as a test check of payment vouchers revealed that purchased airtime valued at K11,134,000 was not recorded and the audit team was unable to ascertain its accountability.
Auditors could also not verify whether goods bought for K21 million had been delivered to the National Assembly.
The report shows that the Office of the President and Cabinet (OPC) made a payment of K529,406 on voucher number 090pv4001892 dated November 20, 2015 and cheque number 060773.
“The cheque was made payable to Lilongwe Water Board on Account number 0026468 which belongs to Capital Hill Restaurant not to OPC. Further enquiry indicated that there was no contract agreement of any kind between the restaurant and OPC,” reads the report.
The National Audit Office (Nao) could also not verify whether allowances of more than K5 million paid out were actually received by the purported recipients at the OPC.
“An examination of payment vouchers revealed that the OPC paid K5,620,000 worth of allowances in cash to its members of staff but there were no liquidation sheets in terms of signatures of beneficiaries as evidence of receipt,” it reads.
Nao also notes that while rules require that ministries should use the open tender method when procuring goods, the Ministry of Local Government and Rural Development spent K300 million in procurement using the single-source method without the approval of the Office of the Director of Public Procurement.
The ministry used a single-source method of procurement on May 9, 2016 to procure services valued at K297,916,243.69 from Wisdom Construction Limited for the construction of Nsanje Boma structures.
The evaluation team settled on single-sourcing despite that another bidder, Ziuya Building Contractor, had already been awarded the contract to construct the structures using open tendering.
Further, about K48 million that the ministry claims to have spent on fuel was not unaccounted for and it failed to show auditors a register where such purchases were supposed to be recorded.
Just like with the National Assembly, the ministry spent K3.5 million on airtime but there was no documentation and the amount could not be accounted for.
Stores items worth K7 million could not be accounted for and fuel vouchers of about K7.5 million were missing at the ministry.
The Ministry of Lands and Housing processed payment vouchers totalling K126 million without supporting documents, and failed to present vouchers worth K93 million to auditors, an indication that the money may have been stolen.
The Ministry of Agriculture, Irrigation and Water Development could not account for almost K2 million in airtime and fuel worth K26 million, while stores items valued at K4 million were missing. The ministry also made payments worth K7 million without supporting documents and prevented auditors from looking at its payroll.
In the ministry’s Agriculture Sector-Wide Approach, payments worth K107 million were made without supporting documents, K28 million worth of payments made towards training and workshops were not matched to activity reports and fuel worth K37 million was unaccounted for.
In the Office of the Vice President, K45 million payments were made without supporting documentation and K83 million for fuel was unaccounted for.
At the Ministry of Finance, fuel purchases worth K7 million could not be traced, while K4 million was paid to ghost employees who were not on the payroll but money had been transferred to their bank accounts.
The Accountant General’s office could not account for K8 million in fuels, while K38,232,502 was misallocated without obtaining prior approval from the Secretary to the Treasury in contravention of procedures.
Not all is doom and gloom about the report, however, as misallocations have improved by reducing to K427,974,099 compared to K4,857,041,661.90 for the financial year ending 30 June 2015, representing 91 percent improvement.
Unsupported payments have improved by reducing to K517,115,701.82 from K16,367,012,333.28 for the financial year ended 30 June 2015, a 97 percent improvement.
Missing payment vouchers values reduced to K158,273,251.61 compared to 29,905,112,806.82 for 30 June 2015, an improvement of 99.5 percent.
In an interview yesterday, Alekeni Menyani, Chairperson of the Parliament’s Public Accounts Committee, said the committee would meet on August 27 to scrutinise the report and act accordingly.
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