Malawi President Peter Mutharika says the Public Finance Management Reform Program seeks to reverse the non-compliance culture. The Presidentsaid we must resolve to make such reforms work. Secondly, it is evident that lack of political will and leadership has undermined the public financemanagement framework of rules and regulations, including laxity in enforcing procurement procedures. We will have to reverse this trend as well.
It is simply unbelievable how we have allowed the usurpation of perks such as officials’ cars whose maintenance is a drain of public resources. In most cases, these cars are being used for personal gains and, at the end of self-proclaimed periods, the officials buy the cars at token prices. The whole system of Government has accepted this without question, evenin times of financial difficulties.
Thirdly, the introduction of electronic technology(IFMIS) into the Public Finance Management System is incomplete, not fully under stood and not used by senior civil servants. As a result, IFMIS is only operated by a younger generation of officials. This has added to the laxity of the senior civil servants to enforce Public Finance Management rules and regulations.
In some cases, there has been an overreliance on IFMIS, which has led to untold losses of funds than was the case during the manual system days. It is well known that the Introduction of IFMIS was done haphazardly, rendering the proper use of the system impractical. The requirements of the system were not properly defined and EPCOR, the software system of IFMIS, was introduced without customization to Malawi conditions.
The training on the use of IFMIS was not done, particularly for the supervisors. As a result the supervisors remain IFMIS illiterate. Controlling Officers disregarded the need to safeguard the system to an extent where they easily shared “passwords with their junior officers”. It is for this reason that the unscrupulous junior officers looted funds while the supervisors either shared orwatched helplessly.
The public finance reform management program reforms will have to redesign IFMIS so that it can be comprehensive and can use a software that is customised to the Malawi conditions. In short therefore, the public finance management reform program envisages the restoration of financial discipline by enforcing compliance of the service with the laws, rules and regulations for governing the management of financialresources in Government.
It seeks to train civil servants on what this framework is aboutand why it is necessary, and will introduce an IFMIS that is comprehensive andcustomised to the local conditions of Malawi. In order to achieve these objectives, wehave decided to embark on the following program: 1. To rehabilitate the Public FinanceManagement System to ensure that it is conducive to expenditure control, financialaccountability and transparency, and be able to generate financial reports that reflect the actual management of financial resources.
For example, because of the incompatibility of the IFMIS and the system that is used at the Reserve Bank of Malawi, the needed bank reconciliations between the Accountant General’s Department and the Reserve Bank of Malawi were never possible therefore, and it has proved impossible to account for the resources that flow in and out of the public financial system. As a result of the reforms that we have already instituted, this is now possible. Secondly, although all financial receipts by the Government are mandated to be credited to the Malawi Government No. I Account, IFMIS itself did not include this account. Worse still, resources from the Malawi Revenue Authority that flow into the Reserve Bank of Malawi were(infrequently), transferred into the No. 1 account.
These serious anomalies and clear blemishes of the public finance system have since been rectified in the course of theconduct of reforms that have progressed intensively and well. The main result is that it isnow possible to conduct bank reconciliations. However, there are other blemishesrelating to various accounts of MDAs at commercial banks that need to be subjected tosimilar reviews so that reconciliations relative to these accounts can also be conducted.Donor withdrawals from Malawi were particularly caused by revelations that, in theabsence of bank reconciliations, accounting of resources was not possible nor werefinancial reports credible. These shortcomings have now been rectified.
