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Lifeline trials: How Social Cash Transfer is being undermined

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KALIATI—We are planning scaling up the programme

The Social Cash Transfer Programme is a well-intentioned social protection initiative that is rescuing lives living on the edge. But 15 years after Malawi started implementing it, it is still being haunted by a raft of challenges, including theft of beneficiary cash. CHARLES MPAKA reports

Four officials from Lilongwe District Council were arrested last year and are answering charges on abuse of funds meant for the ultra-poor under the Social Cash Transfer Programme (SCTP).

This is one of the challenges overshadowing an initiative meant to give relief to some of the desperate citizens of the country.

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Up to 70 percent of Malawi’s population lives below the international poverty line of $1.90 per day, records say. This means that 12.6 million people are living a life of struggle for basic necessities.

Most of these people – the elderly, the chronically sick, child-headed households, the not-fit-for-work – need help with some cash so they can get by.

Modesta Kachikuwo from Namangale Village, Traditional Authority Chikowi in Zomba District attributes the improvement of the welfare of her household to the programme.

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She was enrolled on it in 2013. She was 69 then.

A year earlier, she was struck by stroke, which rendered her unable to continue with her business of selling vegetables, largely tomatoes, in markets around the area.

The business was the lifeline for her family comprising four orphaned grandchildren under her care.

At the time she fell sick, the eldest of the grandchildren was in Form 2 at Mayaka Community Day Secondary School.

“The business was paying his fees. We were struggling but that is all I could do. Then I fell sick. He dropped out of school because we couldn’t manage anymore,” she says.

Along came the SCTP.

The grandson, now 27, completed secondary education. Later, he acquired some electrical work skills through a local apprenticeship. This led to his employment with a construction company in Blantyre.

A product of the National Social Protection Policy (2008), SCTP is designed to support 10 percent of the ultra-poor in each district.

From just 28,000 households that made the beneficiary list by 2012 in 6 districts, the programme now covers all the 28 districts, reaching out to 274,724 households with a combined 1, 259, 260 people as of December 2020.

But the brightness the programme is bringing to lives stricken by extreme poverty is being dulled by some malpractices and systemic weaknesses.

Onsite visits to some districts and reports we have accessed show that from cases of fraud on beneficiary cash to recipient targeting chaos, a host of abuses hang on the initiative.

An audit of the programme under Lilongwe District Council for the May 2018 and December 2019 cash cycle found that as much as K95 million was misappropriated. This means that some targeted beneficiaries did not get the money.

The investigation – conducted by a team of auditors from the National Local Government Finance Committee, Central Audit Internal Unit and Lilongwe District Council –uncovered collusion between technical and accounts officers.

The officers capitalised on inadequate and ineffective internal controls to cook up the books and misappropriate the funds.

“It must be highlighted that it was the technical officers who initiated the whole process of misappropriation of funds,” reads the report, dated 29 October 2020.

The technical officers further generated a falsified reconciliation report of how many beneficiaries were paid or not paid to cover up the footprints of their abuse.

A draft review of the programme processed by an insider at Dowa District Council outlines similar challenges.

It highlights direct cash disbursement as one route through which administrators have bled money from the programme.

“The mode of payment where beneficiaries line up to receive direct cash has been used over the years by community committees and officers to connive and tamper with information and defraud beneficiaries,” reads the review.

Monitoring and evaluation mechanism of the programme is deficient and narrow it does not pick out weakness in time and counter them promptly.

One of the major key facilitators of the fraud scheme, we have found, is the illiteracy of most of the beneficiaries.

Most of those that Malawi News interviewed had little or no formal education, to an extent that some cannot read and write. They have thus been relying on proxies, some of whom cheat them on their payouts.

In addition, the process of identifying beneficiaries involves community leaders. And as some beneficiaries in Dowa, Lilongwe and Zomba report, these leaders have been extorting money from them.

Alefa Kumchenga, from Mponela Village, Traditional Authority Mponela in Dowa District shares her experience.

She had just received her money in July last year when one of the community team members approached her.

“He demanded that I give him a ‘Thank you’ for including me on the list. I asked him to bring all the members of his team so I can give him the money in their presence. He did not return,” Kumchenga, 62 says.

Gift Trapence, chairperson of the Human Rights Defenders Coalition (HRDC), whose whistleblower initiative led to the investigation into the Lilongwe District Council programme, says one of the biggest complaints they received was on ghost beneficiaries.

“There is need to strengthen the systems to make sure that the funds go to the intended beneficiaries,” he says.

He further challenges government to show a little more responsibility towards its citizens by taking charge of funding the programme instead of relying on donors.

Details show that out of the 28 districts where SCTP is running, government is responsible for financing the programme only in Thyolo District which has 16,821 households under the programme.

This means that donors are funding the welfare of around 257,903 households out of the 274,724 that were on the programme by December 2020.

Minister of Gender, Community and Social Welfare Patricia Kaliati says government is planning on scaling up its reach and, generally, expanding the programme.

But that depends on the availability of funds in the public purse, she says.

On fraud undermining the programme, Kaliati says government is strengthening system controls, one intervention being introduction of e-payments.

On concerns that the amounts which range between K7,000 and K9,000 per individual are little, she says there are a number of factors to this.

“It takes a lot of negotiations with donors to come up with these figures,” Kaliati says.

But it also depends on what beneficiaries do with the money, she says.

“If you misspend it, there will be problems. But we are also encouraging a culture of investing the money in small businesses and saving in village savings groups so that you can grow the cash and graduate from this programme,” she says.

On the other hand, the National Local Government Finance Committee (NLGFC), which plays a central role in financial management of the SCTP, rates highly the performance of councils in the execution of the programme.

NLGFC acting Executive Director Kondwani Santhe says the expectation of the NLGFC is for councils to deliver transfers to at least 95 percent of the beneficiary households. In its analysis, councils deliver to at least 98.6 percent of the households.

“As such,” he says, “on a rating of 1 (bad) to 5 (best), councils are rated at 5 as they are able to execute as expected.”

Last year, NLGFC carried out normal audits in 10 district councils funded by World Bank.

“The audit’s general rating is that the controls are ‘strong’ and funds utilisation is ‘satisfactory’.

“The only real challenge the audit noted was that a few beneficiaries, whose passbooks got damaged or those looking for new passbooks (replacing beneficiaries who had died or exited), were struggling to have their passbooks printed on time. However, the Ministry of Gender has already resolved the issue as we speak,” Santhe says.

Platform for Investigative Journalism (PIJ) supported this reporting.

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