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Talking Blues: Scratch mine and I will scratch yours—the Mec and Mera conundrum

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The idiom “if you scratch my back, I’ll scratch yours” traces its roots to the 17th Century English Navy, where the punishment for absence, drunkenness, or disobedience, was flogging.

The offender was tied to the ship’s mast and savagely flogged with a wicked lash by another crew member.

Typically, crew members struck deals and delivered light lashes with the whip (i.e., merely “scratching” the offender’s back) to ensure getting the same when their turn came at some point in the future.

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From the 17th century navy life, let’s get back to our times.

Mec’s messy books and debt:

Stakeholders were meeting recently to discuss issues of “national importance”. Among other things, the well documented financial challenges hounding the Malawi Electoral Commission (Mec) was tabled.

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In short, Mec owes just about every Jack and Jill in town. And due to non-payment, the hounds are out, their eyes fixed on Mec’s assets.

How Mec accumulated debts estimated at K758 million (about $1.1million) against a healthy election budget of K18.4 billion (about $46m), is something a whole conference of chartered accountants and election experts cannot decipher.

Suffice to say that, sensing that something was amiss, the Government commissioned an investigative audit which was duly conducted between April 27 and May 15, 2015.

The audit opened a Pandora’s Box. Funds, it was observed, in billions had been abused and probably embezzled. Over K1.3 billion was not accounted for.

Adding to that, MEC was wasting tax-payers money in blatant disregard of legal and regulatory guidelines enshrined in the Public Finance Management Act (PFMA), Public Procurement Act (PPA) and Malawi Public Service regulations and believe it or not, in this day and age, it was maintaining incomplete records!

Mec blames all this mess on its accounting personnel; saying “they lack experience in public accounting procedures”.

Despite having people who could not tell a ‘debit’ from a ‘credit’ to handle the multi-billion Kwacha elections budget; Mec still thought it wise to complicate matters further by opening and maintaining numerous and unnecessary bank accounts, which naturally made things worse.

The result was that most of these accounts were not being regularly reconciled.

Where Mec accounts staffers learned book-keeping to eventually end up in an accounts office is a mystery, because according to accountants I have checked with, a bank reconciliation is a walk in the park and a must do.

It provides assurance that the cashbook corresponds to what the bank says you have or do not have and therefore, any self-respecting entity rigorously reconciles its bank accounts.

Mec accounts personnel, for whatever reason, had no time for this important exercise and Management, from the lack of enforcement, saw no point in these reconciliations.

Desperate to fend off the damning audit queries, Mec did something it has always considered haram.

For the first time in its controversial history, it abandoned the secrecy code it wields whenever it is under suspicion, and made public documents and records that it says “clarify the audit queries”.

This was too little, too late and far from enough to persuade the auditors whose recommendations called for nothing short of an overhaul at Mec.

To restore professionalism and trust, the auditors advised the Malawi Government, heads must roll.

But as we speak, Mec management is largely intact, probably buying all kinds of goods and services and selling each other public property, in total disregard of the laws of Malawi governing such things.

Sadly, this management is the one expected to conduct and deliver free and fair elections in less than thirty six months to come.

Mera’s chivalry goes wrong

Enough for the moment about messy Mec; I will now zoom on the Malawi Energy Regulatory Authority (Mera) where it’s not raining, but pouring.

In March 2016 it was revealed that Mera had diverted K3 billion from the Price Stabilisation Fund (PSF) to buy maize for Admarc.

Facts are: at the height of the hunger situation, Mera resolved to buy 10,000 tonnes of maize at K270 per Kg for the national grain supplier. Direction was sought from Treasury and none was given. Given the urgency of the situation Mera went ahead.

Then from nowhere, Sealand Investment Ltd, a well-known ‘tenderpreneur’, offered to provide the 10,000 tonnes but at K285 per Kg i.e. K15 more than the K270 per Kg which Mera was using to buy maize, implying an additional K150,000,000.

Mera, unlike Mec would have done, said no. And the moment Mera told Sealand off due to the insensitivity of wanting to make a killing out of a crisis, is when trouble started. All Mera’s good intentions turned, in the blink of an eye, into acts of villainy.

The Minister of Finance, Goodall Gondwe, the very same person who has been dillydallying on Mec, cried foul, described the decision as illegal and bayed for blood.

Check: Scratch my back…

The punishment for Mera’s transgression is that the Board has been directed to immediately suspend and prosecute key officers for ill-advising the board of directors to divert the K3 billion ($4.2 million) to buy maize for Admarc.

The verdict went to the Board in a letter dated May 19 2016 addressed to Mera board chairperson Bishop Joseph Bvumbwe, signed by none other than the Secretary to the Treasury (ST) Ronald Mangani.

The important thing to note on Mera’s ill-advised philanthropy was that hell only broke lose when Mera rebuffed a supplier who has had a hand in many government tenders on Fisp and Mardef administered by the current regime.

This makes it difficult to rule out that someone had been anticipating “grease” and hence the price hike from K270 to K285 per Kg, to build in a cushion with which to “scratch some one’s back”.

Checkmate: I will scratch yours

All this is however nothing.

To put the size of the sleaze at play in full perspective, one has to examine the incongruence of the demand for blood on Mera for breaking the law, i.e. the same Public Finance Management Act which Mec deems not worth the paper it’s written on; and yet Mec gets away with it despite clear recommendations from the Ministry of Finance’s own Central Internal Audit Unit.

This defies all logic.

Let me replay the scene: an audit team from the Ministry of Finance goes to Mec. It finds everything in disarray. To date, only scapegoats – juniors for that matter, have been fired or suspended for decisions they had little, if any, control of.

Incompetent or not, an accounts clerk cannot just go about opening bank accounts all over town, make shady deals with foreign companies and externalise forex without Management’s blessings.

No way.

And yet, Mec Management, save for the Commissioners whose term of office expired, is still very much intact despite presiding over this mess which will stretch our already overstrained budget.

When you look at it, much as what Mera did was illegal but well meaning, Mera’s maize buying adventure pales in comparison to Mec’s Management systemic financial mismanagement.

Now look at the Government response: Mera’s overzealous management allegedly misdirects the Board, and the long arm of the treasury swiftly reaches out demanding mob justice.

Mec on other hand, violates a cocktail of provisions of the same PFM Act, blames it on clerks it employed, and no-one in senior management is touched.

Had Mec been an ordinary parastatal, I would have concluded that Mec is a holy cow and left it at that. But with Mec, there is evidently more.

Legitimate questions I want to ask are: in whose interest is it to merely “scratch the back” of Mec Management, instead of giving it the dosage administered to Mera?

And is this “scratching” of Mec’s back in repayment for services already rendered or a deposit, much like the crooked English crew members did way back in the 17th Century?

If talking blues entertained rumour-mongering as opposed to critical analysis of available facts, I would have argued that Mec is simply reaping what it sowed in May 2014 and this “scratching of Mec’s back” is repayment and hence no-one is bothered with the gross incompetence, possible embezzlement and blatant decadence.

If you think this is disgusting then you have another think coming. How about if someone is actually “scratching Mec’s back” for future favours?

This cannot be ruled out because there is no electoral official easier to blackmail than one that already stands compromised, like Mec management is. And Mec being the kingmakers in Malawi, everyone knows what I am talking about here.

Be worried, be very, very worried.

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