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How Ministry of Foreign Affairs connives with embassy staff to siphon money in embassies

As Malawians anxiously await the day when the court will make its determination on the case to do with the alleged embezzlement of huge sums of money by former staff at the Malawi Embassy in Ethiopia, murky details are emerging regarding how some officials at the Ministry of Foreign Affairs in Lilongwe connived with their colleagues at the once closed Malawi Mission in Nairobi, Kenya to siphon money, Malawi News can reveal.

It is believed that over half a billion Kwacha of taxpayers’ funds grew wings at the Malawi embassy in Kenya.

Another puzzling factor is that when signatories to a bank account that was opened over the period November 2005 and December 2012 were being changed, the ministry opted to go with officers who were relatively junior ranked compared to those who were initially handling the task.

Malawi News investigations can reveal that Government in 2005 opened a special bank account for its properties when it closed the Malawi mission in Nairobi.

This account was opened at the Equatorial Commercial Bank (ECB) on 25th November 2005.

The names of the initial signatories during the opening of the bank accounts could not be traced. However, a letter dated 7th March 2012 from Justin A.K Saidi, the Principal Secretary for the Ministry of Foreign Affairs at that particular time indicates that the signatories were Dr Macphail Magwira, who was Director of Finance and Administration and Wilkinson Chipatso who was Controller of Accounting Services.

Subsequently, during the same period of March 2012, these signatories were changed to Chifundo Patrick Sly Kapulula (the then Chief Accountant) and Chigomezgo Rodwell Thomas Munyenyembe (the then Principal Administrative Officer).

The change came in because both Magwira and Chipatso were transferred to other ministries. As per the bank statements analysis below, it is somehow odd to notice that the movement of money from the bank accounts started immediately after the change of the signatories.

The mission also had other operating accounts with the bank prior to its closure.

There were also properties such as the official residence for the High Commissioner and the Chancery which were rented out.

Our investigations show that although the embassy was briefly closed, the bank accounts were frequently accessed.

Minister of finance Goodall Gondwe said he could not comment on the matter, and referred Malawi news to Auditor General.

With the limited information that we obtained, it is highly likely that a lot of tax payers’ money was abused or stolen.

Public Accounts committee of Parliament chairperson Alekeni Menyani said his committee is aware of the many irregularities at the embassy in Kenya.

He has since demanded that a forensic audit by experts be undertaken to establish the full amount of public money lost and that all those responsible must be taken to task.

In an interview on Wednesday, Principal Secretary in the Ministry of Foreign Affairs Isaac Munlo said the 2012/13 audit report just goes to confirm how officers from the ministry abused their various positions.

He claimed that the challenge is that most of the officers that have been implicated in the report are no longer working at the ministry. He was, however, quick to say that the matter is now in the hands of the Attorney General.

“We have started the processes to recover the money, interesting enough the Kenyan Government officially wrote Malawi government that they will help with the investigation on the matter,” he said.

Munlo said systems are already in place, stressing that people who have been mentioned in the Audit report are within the country and it is just a matter of opening a case for them.

The Ministry of Justice is aware of what happened in Kenya and is reportedly giving the matter some attention.

Bank Accounts Analysis

The Account Number from where the money was withdrawn is 0400589701- Government of Malawi Properties Account, Equatorial Commercial Bank,

Hurlingham Branch, Nairobi, Kenya.

The bank statement that MalawiNews has seen for the properties account covers a period from November 2005 to somewhere in December 2012, with total debits of $ 423,112.73 (Approx. K306,843,467.36) and total credits of $ 371,813.32(Approx. K269,640,878.73) respectively and had a zero closing balance, meaning all the money was depleted.

Based on our analysis, the bank account was inactive for many years up until May 2012 when some significant amount of money started being paid out.

Another statement for account number 0400589705 – ‘Government of Malawi ORT Main Account’, at the same bank shows that as at November 15, 2013, withdrawals amounting to 12, 952,598.95 KES (approx. K91, 000,000) were made. Specific withdrawals ranged from 50, 000 KES to 500, 000 KES.

The bank statement did not show the particulars of the individuals or companies who benefited from the payments.

Another bank statement for account number 0400589702 called ‘Government of Malawi Deposit Account’, shows that in May 2013, the deposit account had two high value figures of 5, 000,000 KES and 6, 990,000 KES(approx. K83, 000,000).

Other bank accounts that were looked into are the Visa account number 0400589702 and the Salaries account number 0400589703 which also had some payments made out.

Treasury Instruction number stipulates that no bank account shall be operated for deposit or withdrawal of public money without the express authority of the Secretary to the Treasury.

As for the transfers between bank accounts, no evidence could be traced to support the legitimacy of the wire transfers. According to the law, Treasury Instruction 4.14.1 states that specific approval is required before any allocations can be vired or transferred between outputs.

The Public Finance Management Act authorises the Secretary to Treasury, with the approval of the Minister and at the request of a Controlling Officer, to direct the transfer of funds between the provisions assigned to programmes/ item under a Head/Vote of expenditure, or to create a new programme/item if the amount appropriated under the Head/Vote is not exceeded.

According to the Treasury Instruction Schedule, if the Controlling Officer is satisfied that the provision against a Programme/item will be inadequate, he may submit an application to the Secretary of the Treasury to wire or transfer funds between a programme/item within the same vote.

The application should be in writing and should be signed personally by the Controlling Officer.

The Malawi diplomatic missions abroad were established to facilitate the promotion of sustainable development, economic growth, tourism and trade competitiveness, and strengthen areas of economic and political cooperation at both bilateral and multilateral levels and maximize the effectiveness of their representation in promoting and attracting direct foreign investments and aid.

The purpose emanates from Ministry of Foreign Affairs and International Cooperation’s mandate which is to promote the interest of Malawi in foreign countries by formulating, interpreting, implementing and monitoring the Malawi Government’s foreign policy with emphasis on development diplomacy.

However, embassies have turned out to be conduits for siphoning money by those in power.

In April 2016, Malawi News also reported that K184 million had been stolen by staff at the Malawi Embassy in Addis Ababa, Ethiopia, and the case remains unresolved to this day.

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