Malawi Govt closes down 20,000 bank accounts for dubious deals

LILONGWE-(MaraviPost)-A Malawi News investigation has established that there is a syndicate of civil servants who have been conniving to siphon off public funds using over 20,000 dubious accounts since early 1990s.

Minister of Finance, Economic Planning and Development Goodall Gondwe confirmed the existence of the syndicate but refused to comment on the matter saying it was “very sensitive and strictly confidential”.

Gondwe said government has taken steps to recover the money and bring to justice the suspects and the accounts have since been closed.

“We are aware about the dubious accounts…. We have since closed almost all the accounts,” he said

An investigative report – originating from a tip on possible fraud in government – on government pensions, gratuities and terminal benefits by the Auditor General’s Department in 2017 revealed that MK3.2 billion in fraudulent payments from the public funds were made in three years ending June 30 2017.

Anti-Corruption Bureau (ACB) Director General Reyneck Matemba has confirmed about the syndicate and said they are investigating the matter.

“I can confirm that the ACB is aware of this matter. This matter was brought to our attention by the Ministry of Finance some two months ago. When we looked at the nature of the matter and the information that was provided, we immediately acted on it, pending further investigations,” Matemba said.

Matemba said, in the course of conducting the investigations, ACB discovered that there were a number of glaring anomalies in the information that was passed on to them.

He, therefore, said ACB is continuing with the investigations on the matter, in collaboration with one law-enforcement agency which he could not disclose its name to avoid prejudicing the ongoing probe.

The other two agencies mandated by law to investigate financial crimes are Financial Intelligence Authority (FIA) and Fiscal Police.

But Malawi News investigations can reveal that civil servants, especially working at the Accountant General’s Department and Information Technology sections, have been conniving with major banks in Malawi to defraud taxpayers through ghost accounts.

The fraud is concerning gratuity cheques that have been processed at the Accountant General’s Department but whose beneficiaries are not genuine retirees in various ministries and departments.

Terminal benefits payments made and data from Human Resources Management Information System (HRMIS) revealed that some employment numbers were shared by two or more officers.

According to the Malawi News investigation, the syndicate has been using accounts of officers who cease to use an employee number due to death or retirement.

HRMIS works in way that a pensioner is allotted a number and the person dies, the pension number should never be re-used since it is a unique number.

However, some of the employee numbers for the officers who retired and died since early 90s were re-introduced in the system.

Public institutions that were involved in the malpractice include ministries of Health, Education, Gender, Agriculture, Natural Resources and Energy and Mining and State Residences, Malawi Police Service, Malawi Defence Force and Labour and Human Resources.

Others are Judiciary, Office of the President and Cabinet and ministries of Lands, Housing and Urban Development, Information, Tourism, Civic Education and Finance, Economic Planning and Development. Malawi Prisons Service and city and government councils were also involved.

The 2017 audit report revealed that an estimated MK2.9 billion is suspected to have been paid to retired officers’ names missing in HRMIS master database as at June 30 2016.

The audit revealed that 50 deceased officers with payments amounting to MK177, 159,152.67 were still appearing as active in the master data payroll of all employees by end of June 30 2017.

In 2013, there were revelations that some civil servants siphoned over MK30 billion from government coffers in a space of two years, a fraud revelation dubbed Cashgate.

Top government officials used fellow civil servants, especially in Information Technology Department and at Accountant General’s office, to log into Integrated Financial Management System remotely to steal public money.