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Malawi government closes 139 bank accounts

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As part of the Public Finance Management (PFM) reforms, government has closed 139 dormant bank accounts belonging to various ministries and departments at the Reserve Bank of Malawi (RBM) and their balances have been transferred to government’s main operating account (Account Number 1), The Daily Times has established.

In addition, 265 dormant accounts, have been submitted to the Accountant General for review.

This development comes as Malawi is still nursing the deep wounds of massive plundering of K24 billion of public resources which was discovered in September 2012 in the infamous Cashgate scandal.

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Finance Spokesperson, Nations Msowoya, while confirming this development added that the closed accounts and those under review, were opened for different activities and projects but were not closed at the end of the project.

“The signatories were people in ministries and departments but I don’t have the list right now. The fact that they remained there posed a high risk to government and their closure should be welcomed by all,” he said.

After the Cashgate scandal, it was discovered that the government’s payment system, the Integrated Finance Management Systems (Ifmis) had a weakness which allowed this to happen.

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“Concrete actions have been taken to increase the coverage of Ifmis. The main government bank accounts have been incorporated into the Ifmis and the backlog of all transactional data for 2014/15 has been captured. Payments of budgeted expenditure that are generated outside of the Ifmis have also been reduced. The ultimate goal is to integrate all bank accounts into the Ifmis to improve the accounting and control of public resources,” Msowoya said.

The Daily Times has learnt that hardware and network upgrades the reliability of the Ifmis, adding that the procurement of additional servers and the network upgrade have increased processing speed and reduced downtime.

In addition to that, Msowoya said, these upgrades will help accelerate bank reconciliations. He also said that an Ifmis security officer has been appointed to manage the security of the system and provide security training.

He also said controlling officers have been explicitly charged with improving financial discipline within spending units. Mandated actions include ensuring that commitments and payments do not exceed the released funds; providing cash flow forecasts; performing timely bank reconciliations; submitting the annual financial statements in a timely manner for audit; and certifying monthly financial statements.

Msowoya said that additional initiatives are being taken to foster budget control and transparency saying the authorities have instituted independent audit committees, responsible for reviewing audit matters presented by internal and external auditors. In addition, the authorities are in the process of introducing treasury inspectors in ministries to oversee budget planning, monitoring and evaluation.

Meanwhile, government claims to have managed to recover K300 million out of the K24 billion. Ten people have since been convicted in on-going Cashgate cases.

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