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K100 billion lost in 5 years

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REFFERED THE MATTER TO STATEMENT—Kalilani

A data analysis by Malawi News on the Auditor General’s reports shows that taxpayers’ money over K100 billion has been lost due to corruption and fraudulent payments made from public funds in government ministries, departments and agencies (MDAs) from the last five annual audit reports.

These audits, from 2013 to 2019, are the ones that the Office of the Auditor General has been presenting to Ministry of Finance and the National Assembly.

The K100 billion lost in these financial years means that, on average, the country is losing about K20 billion every year due to corruption and cartels fuelled by leaky government processes.

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Commenting on the matter, Chancellor College-based economist Ben Kalua said the amount that the audits could not be accounted for could be more than that.

“Malawians have lost moral decay, years back, one could have been arrested for stealing one tambala but now life is usual for people who are stealing public money, this is serious, look at how land is being corruptly sold and the Anti-Corruption Bureau [ACB] cannot even come in to do investigation, this country is in a serious problem, when it comes to corruption and fraud,” Kalua said.

He said ACB has failed to investigate such malpractices but this could have been their job to ensure people are accountable for stealing taxpayers’ money.

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When Malawi News put the numbers into perspective, the K100 billion lost in five financial years was enough to build 30 community day secondary schools with hostels, laboratories, books and staff houses.

Again, K100 billion is enough to support 150,000 needy students per year in public and private universities.

The same amount is also enough to procure drugs for all the district hospitals and health centres in the country for five years.

Our analysis further shows that K100 billion is also enough to pay for salaries and wages for civil servants for a year.

If used to procure maize, K100 billion would be used to procure over 625,000 metric tonnes of the staple.

If invested in the energy sector, K 100 billion could result in 28 percent increase to the total electricity production in the country.

The same amount is enough to construct about 6,000-kilometre road network in rural areas that could improve access to markets and other social services.

K50,300,000,000 was not accounted for in the 2014-2015 financial year with the reasons being misallocated expenditure payments, payments made with unsupported documents or no evidence at all and missing payment vouchers.

Malawi News investigations further understand that K3,236,210,598. 73 billion could not be accounted for in the financial year 2017-2018 on grounds of payment with unsupported documents, fake remittances, stores not traced, payments for goods not delivered, procurement with no evidence, allowances with no activity reports, fraudulent payments to personal bank accounts, payment for materials or services not delivered.

Other isolated irregularities include payments without certificate of completion, procurement to suppliers not registered and travel allowances paid to trips not made among others.

While in 2013-2014, MDAs could not account for K19,749,050,275 of tax payers’ money due to what the Auditor General calls total non-compliance to the Public Finance Management law.

But it is life as usual for public officers who were supposed to be accountable for misuse of the taxpayer’s money.

However, Acting Auditor General Thomas Makiwa said, when they have audited a client, the office writes management a letter on the findings of the audit.

He, therefore, said his office is not mandated to do the punishing or the sanctioning of controlling officers based on findings in the audit reports saying the sanctions are supposed to be done by oversight agencies such as Public Accounts Committee (Pac) of Parliament for scrutiny.

“The Auditor General is mandated by Section 184 of the Constitution and the Public Audit Act of 2003 to conduct audits of all government institutions including statutory corporations. Section 6 (1) of Public Audit Act (2003) states that ‘the Auditor General shall undertake a programme of audits, and in accordance with Section 7 (2), examine transactions, books and accounts, and other public records of every Ministry, statutory office, agency, board, commission and bureau of the Government, and public funds received by a non-profit organisation, including relevant international organisations,” Makiwa said.

Minister of Finance spokesperson Davis Sado said when the Auditor General submits the audit report for a particular year to Parliament, concerned controlled officers are summoned to Pac to give an account and respond to the queries that were raised in the report.

He said, after that process, Parliament through Pac prepares a consolidated report to Treasury for the outstanding issues that were not cleared by Pac, adding Secretary to the Treasury writes MDAs to explain themselves on the outstanding issues.

“After which, Treasury consolidates all the responses from the MDAs and prepares a Treasury Minute, again MDAs are summoned on the unresolved matters. If it transpires that the matter indeed involved abuse of office, a proper disciplinary action or even prosecution through the law-enforcement agencies is done.

“As we speak, we have some officers who are on interdiction, some have undergone prosecution and are serving sentences, on others, administration action has been done depending on the nature of the matter but it has to be understood that, in most cases, big chunk of the issues raised are to do with processes and procedures which MDAs fail to comply with and poor record keeping. But as we are reviewing the Public Finance Management Act, such matters have been looked into,” Sado said.

Pac Chairperson Ken Kandodo said when Minister of Finance presents audit reports in Parliament, his committee scrutinises them.

“If there are audit queries, the committee invites the line ministries to respond and if we are not satisfied, the committee writes Secretary to the Treasury to deal with the matter and Treasury is supposed to write Treasury minutes based on their findings,” he said.

Kandodo, however, said the current cohort of Pac have not received any Treasury minutes.

In Spetember 2013, allegations of the massive looting of government money became public following the shooting of the Finance Ministry’s then budget director Paul Mphwiyo.

In March 2018, ACB received 67 files based on a forensic audit covering the period 2009 to 2014 which found that K236 billion could not be accounted for in government books.

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