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STEALING FROM THE POOR: Councils plundering public works funding

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An audit by the Local Development Fund (LDF) has uncovered widespread abuse in district councils of the $102 million which Malawi Government sourced from the World Bank for the Masaf IV project.

Through LDF, government is implementing Public Works Programmes activities under Masaf IV project as one of the interventions to ease the impact of January 2015 floods and 2016 growing season drought.

In the programme, affected households engage in community development activities for which they are paid to help them contend with the impacts for food insecurity.

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Now findings of an audit by LDF indicate that a good amount of the money is being stolen leaving the would-be beneficiaries without support.

LDF presented the findings of the audit as a stakeholders’ review meeting in Blantyre last week and according to the findings, councillors are among those that have been helping themselves illegally from the money by hijacking the responsibility over all processes related to implementation of the programme.

“Attempts by council staff to provide technical advice and monitor project progress are being frustrated,” it says.

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The audit found that councillors and on-the-ground structures have been keeping the real numbers of beneficiaries to themselves so as to pocket the money.

In some cases, they would produce a list containing too many beneficiaries while only a few are working on the ground –suggesting that the officials pocket the money for the non-existent beneficiaries.

The audit also found the identification of beneficiaries to be fraudulent and chaotic: Two or three beneficiaries coming forward to claim payment on the same name and community leaders failing to identify the genuine beneficiary; some beneficiaries’ name being used now and then on the same or different projects; and youths asked to queue for payment on ghost names and then surrender the payment to community leaders right at the pay point

It was further established that councils have been creating ghost projects and then would arrange to have ‘beneficiary’ wages shared among creators of the false projects.

According to the investigation, the fraud was at every level – from district council officials to chiefs and leaders in community development committees.

Both the Ministry of Local Government and Rural Development and LDF secretariat have warned serious action against the abusers of the money.

Chief Director in the Ministry of Local Government and Rural Development Dorothy Banda told the meeting last week that the ministry is ashamed with such reports of abuse of money meant for the poor.

“What is worrying is that while government is keen on ensuring that councils, as custodians, implement these projects according to the letter of the law, the same council officials are busy stealing the money,” she said.

She added: “This money is for poor people. It is for development of their communities; so we will not spare anyone from punishment for abusing the money. Whether you are just a councillor, official at the council, chairperson of the council or Mayor, we will punish everyone.”

She said time has come to remove the rot in the district councils.

“We know there are some officials that are creating ghost beneficiaries and they pocket the money themselves. We are coming after you. We want to see change. People want to see their areas develop. They want to see change,” she said.

Executive Director for LDF Charles Mandala also expressed concern with rampant abuse of the money in the councils.

He said failure by many of the councils to submit reports on how they are using the money only goes to justify fears of abuse of the resources going on in the council.

He said the failure also affects the disbursement of the money by the World Bank for the continuation of the public works.

He said currently, only half of the 35 councils in the country have submitted their reports and warned there will be consequences for those that have not submitted the reports.

“The councils that have not submitted their reports will not get any further funding. We want all their transactions to be above board. We want to ensure that the money goes to what it is intended for, not into the pockets of some unscrupulous people,” he said.

The project was supposed to end in June 2018 but will be extended to December 2019. – Steve Bombeya contributed to this story

Further findings of the audit

  • Sub-projects approved at full council are eventually changed on the ground during implementation
  • Working on the same project repeatedly
  • Weak controls over beneficiary identification and selection
  • Weak controls over beneficiary wages preparation and payment
  • Collusion between council accounts staff and community leaders to divert beneficiary wages
  • Foremen, sub-project team leaders distorting total number of beneficiaries reached
  • No proof of delivery of implements, materials and inputs at sub-project sites in some councils
  • Poor procurement planning
  • Materials or equipment procured and paid for but not delivered
  • No value for money in some procured material or inputs
  • Misapplication of funds in some instances
  • Administration funds being abused
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