BLANTYRE-(MaraviPost)—Forensic auditors of what was initially K577 billion cashgate—now reduced to K236 billion—have expressed disappointment over Malawi government’s inaction to curb fraudulent procurements 11 years after the evil practice was detected in 2005.
According to Weekend Nation Newspaper, the audit report covering the period January 2009 to 2014, the auditors—RSM Risk Assurance Services LLP of the United Kingdom—said the 11-year inaction, especially in procurement mischief, lack of follow ups on red flags and poor cashbook reconciliation increase the risk of another “Cashgate type event.”
“On a more general note, many of the issues set out above and in the following paragraphs, are not dissimilar to those that have occurred in Malawi since 2005. Thus, it is disappointing to find that, whilst some improvements have been made, many weaknesses still exist.
“This, in turn, gives rise to concerns over the proper stewardship of the funds and the associated regualarity of the expenditure, irrespective of whether these funds are generated from within Malawi or are provided by the international donor community,” reads the report in part as quoted in the Weekend Nation.
The forensic audit report has also exposed former ruling People’s Party ( PP) as the main culprit in the plunder of more than 90 percent of that figure, contrary to what opposition parties made people to believe.
PP came into power as default government in 2012 when president Bingu wa Mutharika died in office. The following 24 months was characterized by wanton stealing of public funds through a process dubbed Cashgate.
The Auditor General’s report shows that hundreds of payments without supporting documentation were made from Capital Hill to PP politicians and close associates of immediate-past president Joyce Banda.
Most of the money was channeled to the party’s campaign activities towards the 2014 General Election preparations.
.The audit reveals that K83.5 billion was paid to 44 of the businesses which were selected as part of the sample of 50 businesses which matched to the bank transactions.
The report says to date, 13 businesses and K17.08 billion have been subject to review and that of these 13 cases alone have allowed the audit to identify at least $19.6 million in possible savings and recoverable costs.
These are $14.2 million in overpayments for goods and services; one duplicate payment of $5.45 million which the report says should be subject to immediate recovery; and $29 166 overpayment on shipping to wrong locations.
Accoring to the report, there is evidence to suggest that a number of cartels are winning contracts through restricted tender and single source procurements sometimes to supply quantities that do not reflect the actual needs of the MDAs.
“These groups of suppliers are owned by the same individuals with the majority of trade being inter-company implying that limited actual trade exists,” reads the report, adding:“This suggests ‘layering’ a method sometimes used to hinder or prevent investigations in accurately tracing the source or destination of transactions and flow of funds.”
It reports that the use of bank cheques to move funds between related suppliers could be seen as an attempt to deliberately conceal the audit trail.
“Of even more concern is that we have gathered evidence which suggests that manipulated procurements have taken place as late as December 2015 and are therefore likely to be continuing,” says the report.
The looting and plundering of public funds came into limelight after the shooting of the then budget director Paul Mphwiyo in September 2013.