Massive plunder
An investigative report by the Auditor General’s Department on government pensions, gratuities and terminal benefits reveals that K3.3 billion in fraudulent payments were made from public funds in a three year period ending June 30 2016.
The audit originated from a tip off about possible fraud concerning gratuity cheques that were processed at the Accountant General’s Department but whose beneficiaries appeared not to be genuine retirees at the Ministry of Education, Science and Technology.
Over K2, 959,432,664.70 is suspected to have been paid to retired officers’ names missing in the Human Resources Management Information System (HRMIS) master database for both active and inactive employees as at June 30 2016.
HRMIS master database is supposed to keep all records for serving, retired and deceased civil servants.
“However, at the time of the audit when interrogating the HRMIS master database for period ending 30 June 2016, we noted a significant number of officers were missing from the master database of all employees,” notes the report.
The audit searched the names in the HRMIS data using employee number as provided on the payment voucher supporting documents.
“The searched names could not be traced but their employee numbers were found and assigned to different names. For example, George M Kachikopa with employee number 12007 who was paid K15,463,773.57 could not be traced but his employee number was found to have been assigned to Hetherwick R.Z Njati currently working in Ministry of Finance.
“A total of 766 retired officers’ names could not be traced and payments for all the anomalies amounted to K2, 959,432,664.70,” explains the report.
A total of K393,625,019.99 appears to have been lost through duplicate employees.
A comparison of terminal benefit payments made and data from the HRMIS revealed that some employment numbers were shared by two or more officers.
The report cites examples of employee number 369 as indicated on the payment voucher attachments of James Patterson Kalipande who was paid K97, 400,419.14, whose employee number 369 also appeared to have been allocated to Stanley S.P Mbewe on the payroll.
The report says the auditee could not provide substantial explanations how this happened. A total of employees shared the same employee number to which payment amounted to K393, 625,019.99.
The third largest loss was K254,022,929.00 attributed to pensioners’ employment numbers used by alleged retiring officers. Upon retirement, an officer ceases to use an employee number. He or she is allocated a pension number and is introduced on the pension’s payroll. The employee numbers are disabled and no one must use them. Similarly, when a pensioner is allotted a pension number and the person is deceased, the pension number should never be re-used since it is a unique number.
“The audit team observed that employee numbers for the officers who retired years back were re-introduced in the system and re-allocated to some allegedly considered as retiring civil servants. A search of 20 names of the so called retiring civil servants seems not to relate to any former civil servant as their names do match with those existing in HRMIS Master Database. This irregularity has resulted into an amount of K254, 022,929.00,” explains the report.
The audit reveals that 50 deceased officers with payments amounting to K177, 159,152.67 were still appearing as active in the master data payroll of all employees by end of June 30 2017 which is an anomaly because when an officer has passed away while serving, he or she is immediately removed or deleted from HRMIS payroll and death gratuity is initiated. However, record is still kept in the HRMIS master database for all deceased employees’ names and are assigned a termination code showing that they are deleted (deceased) and all those that are still serving are assigned code zero meaning active.
Other losses are from pensioners receiving double payments and retired officers still appearing as active employees in HRMIS.
Different public institutions were involved in this malpractice that cost the tax payer over K3.2 billion. They include ministries of Health, Education, Gender, Agriculture, Natural Resources, Labour, Lands, Housing, Information, Tourism, Civic Education and Finance.
Others are the State Residences, Department of Human Resources, Police Services, Malawi Defence Force, Judiciary, Office of the President and Cabinet (OPC), Prison Services and National Assembly.
The payments were made across various cost centres and ministries in the whole country through different banks.
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