Malawi is a small country in Southern Africa with an estimated population of 18 Million. It solely depends on donor aid to finacially support it’s national budget.
As it is recommended by world bank,that every country should have an accounting system that is transparent and accountable.
Malawi has integrated financial management information system (ifmis).It is a computerized accounting system that provides check and balance services on all government transactions.
Source: Malawi Accountant Dept
In May 2005, the Government decided to adopt and implement an EPICOR
based IFMIS following the study tour to Tanzania in March 2005.
In June 2005 a Memorandum of Understanding was signed between the
Government of Malawi and the Government United Republic of Tanzania to
enable the Government of Malawi benefit more from exchange visits.
In July 2005, The Government of Malawi signed a Contract with Soft –Tech
Consultants to supply and assist in the implementation of IFMIS in Malawi
Under EPICOR based IFMIS, Government decided to streamline its
payment system by moving away from a Decentralized to a Central
Payment System (CPS).
Unfortunately the system is not being followed by some technocrats and civil servants in responsible positions.
Our investigative reporter has discovered allegations of manipulation of the system is taking shape. He has been told by an insider that; most public institutions have second bank accounts that are used to siphon govt funds without following appropriate channels as required by imfis.
Case Study #1
Citizenry were shocked to learn that Malawi Electoral Commission(MEC) has 4 parallel bank accounts apart from the required synced official Account #1 at Reserve bank.
On 20th May 2019
A bank cheque of K4 Billion was leaked that proved Mec has a bank account under the name of it’s Chief Electoral Officer Sam Alfandika,which was opened in March 2014. It was later revealed more payments will still be made to other three accounts namely;
1) Presidential and Primary Account
2) Local Government Account
3) Operations Account
And their signatories are the Chairperson, Justice Dr Jane Ansah, Commissioner Linda Kunje, myself, Mr Phanuel Hamsini, Mr Khumbo Phiri, Mr Duncan Jumbe and Madam Sheila Kamanga.
All these activities were done without informing the nation, it was done within their perimeter.
Case Study #2
Baker Tilly 2013 Audit Report established that;
A preliminary review of the deleted transactions has been completed and a total of 598 entries have
been found to have been deleted from the IFMIS system using the User ID of four individuals.
At the time of this report our findings have identified payments to 16 companies valued at
MK6,096,490,705 where no evidence has been provided to support the provision of goods or services
in relation to the payment made as such MK6,096,490,705 should be classified as theft of Government
Funds and subject to appropriate legal action.
In addition we have identified high value payments made to two newly formed companies. The
contracts awarded, if compared to international external price verification resulted in MK
3,619,539,979.20 at best being spent inappropriately or at worst, being stolen.
We found that additional payments totalling MK 3,955,366,067.19 had then been made to the same
two companies. At the time of this report no supporting evidence has been provided in relation to these
payments. In the absence of suitable evidence consideration should be given to immediate further
investigation of those involved in the approval of these payments. This may lead to charges being
made against the individuals concerned.
This table summarises the different types of misappropriation.
No. Type Amount Amount
M K %
1)Cashgate transactions 6,096,490,705 45%
2)Payments with no supporting documents 3,955,366,067 29%
3)Inflated procurement prices 3,619,539,979 26%
After seven years,the fraudulent trend has not stopped yet,it is happening in all public institutions.
Another shocking revelation was the leaked cheque in 2013 from the Ministry of Trade,Industry and Tourism,paid K16,750,600 to Exploration Company owned by Kettie Kamwangala on 23rd October 2013,without any legal binding contract detailing the services being offered.
Our investigative reporter has uncovered the hidden truth behind the Payment.
Mr Oddoi Kamange who was then the procurement officer at the Ministry,approached the business lady to write a proposal to the Ministry;intending to promote Malawi Tourism locally and internationally.
She sent the intent letter(physically to the Ministry).
Her budget was K36 Million and she requested half payment to be made in advance for logistics
Mr Kamange,later phoned her and informed the application was successful.She asked him for official legal binding contract but he brushed it off and said “she will get it,at a later stage”.
Within few weeks she got the cheque(which was received by her messenger)mentioned above as her first payment and she begun to do her end of the bargain that is preparing all promotional products etc.
While in the midst of supplying,she was called by her Mr Kamange to collect extra cheque of Millions and he told “these are our monies just cash them through your account and give us the money”.
In which she refused to accept them and for the third time she asked for her contract and the man ignored her request.
That’s when the scandal of cashgate broke out in the midst of these phony transactions.Before she could came to a realization of the whole sinister motive behind Mr Kamange.She was arrested as being suspected of money laundering and fraud(we shall continue this story at a later stage).
Our questions are;
(1) Who approved the cheque at Reserve Bank? Knowing the fact that every account has responsible person(s) who approves all government payments?
(2) Who approved the Payment at the Ministry without any formal legal binding contract?
(3) Who were the responsible persons in 2013 at this Ministry?
-Principal Secretary of the Ministry?
There are so many unanswered questions that is revealing how the imfis is being manipulated,not followed and abused.
Stay tuned for the next edition as we look into the findings of Auditor General financial report for 2018/19.