14 June 2018

Malawi: Cashgate Still Going On, Observes Malawi Parliament - 'Punish Public Finance Abusers'

Parliament's powerful and influential Public Accounts Committee (PAC) says civil servants continue to plunder public money through dubious sourcing of goods and services.

The chairperson of PAC Alekeni Menyani told parliament on Wednesday that for instance, the Immigration department paid out a staggering K2.7 billion for what he described as bogus substandard goods.

"They (controlling officers) do this because they are not punished. The public sector has degenerated into lawlessness and chaos as far as public money is concerned," he said.

Menyani said there was need for the chief secretary to take stern measures against those who disregard the public procurement Act when sourcing goods and services.

He said controlling officers and other civil sertants continue to connive with suppliers of goods and services inorder to defraud the government of public money.

He suggested that the state prosecuting agencies; the Anti-Corruption Bureau and the Financial Intelligence Services to investigate such institutions and their officers.

"It is therefore imperative that all controlling officer and other relevant public officers abide by the stipulation in those legal instruments and that government should take serious steps in ensuring that those who fail to do so are punished," said Menyani.

There was no immediate response from the government.

PAC derives its mandate from sections 18 and 19 of the Public Audit Act, 2003, and Standing Order 161 to, among others, promote accountability and examining audited public accounts.

In 2013, the shooting of former Ministry of Finance budget director Paul Mphwiyo outside the gate of his Area 43 residence in Lilongwe led to revelations of the plunder of public resources at Capital Hill.

Former president Joyce Banda ordered an audit which British firm, RSM (formerly Baker Tilly), undertook covering a randomly selected six-month period between April and September 2013. The audit established that about K24 billion was siphoned from public coffers through dubious payments, inflated invoices and goods or services never rendered.

In May 2015, a financial analysis report by audit and business advisory firm PricewaterhouseCoopers (PwC) also established that about K577 billion in public funds could not be reconciliated between 2009 and December 31 2014. The K577 billion figure was later revised downwards to K236 billion in another forensic audit released in 2016.

In December 2015, first Cashgate convict and former principal secretary for Tourism Treza Senzani, who died after her release in October 2016 after serving her three-year sentence, alleged in a witness statement that the highest level of the Juyce Banda administration was involved in Cashgate.

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