A leaked parliamentary report reveals that millions of rand from the public health system have been misappropriated in Malawi, the world’s sixth poorest country. By Wongani Msowoya for AMABHUNGANE.
Millions of rand seeped out of Malawi’s public health system last year through fraud, payroll manipulation and unauthorised payments, a leaked report from the office of Malawi’s Auditor-General indicates.
The losses form part of audit queries to the tune of MK4-billion (R80-million) highlighted by the report.
According to the World Health Organisation, Malawi’s health indicators are among the worst in the world, with a high HIV/Aids prevalence and widespread malnutrition.
Global Finance magazine ranks Malawi as the world’s sixth poorest country, with a per capita GDP of $1,139 a year.
According to Auditor-General Stephenson Kamphasa, the audit – signed in May 2017 – only covers about 68% of government accounts, as many ministries and departments failed to submit their financial reports for audit.
Kamphasa also noted that bank reconciliations for June to December 2015 and reconciliations for draw-downs from the government’s Payment Management System against cash received at the Reserve Bank holding account were not prepared for the period under review.
The report was submitted to parliament, the finance ministry and President Peter Mutharika, but has not been released to the public.
It particularly highlights the problems with financial management in the health sector, and implicates by name several health officials it accuses of defrauding the government.
The audit queries range from unauthorised payments to suppliers to misallocation of funds, fraudulent manipulation of data and payments without supporting documents for verification.
In the health department, the following abuses are listed:
In one case, when excess money was paid to a dead man, the supervisor claimed the man’s wife was the beneficiary. However, the report adds that there was no valid evidence for the remittance and “the accountant vanished during the questioning”.
At Dowa district hospital, in central Malawi, a laundry attendant admitted to receiving extra money in his bank accounts, claiming that a data entry clerk at the health ministry headquarters in Lilongwe was responsible for making irregular changes.
The report points a finger at health officers at the Chiradzulu and Manza district hospitals in southern Malawi, where “irregularities arose around the payments of arrears … other differences [between what was and should have been paid] involved personnel from the accounts section and human resource departments responsible for processing salaries”.
At Kamuzu Central Hospital, the country’s biggest referral hospital, it says irregularities were facilitated by a supervisor in the accounts section, whom it names.
Minister of Finance Goodall Gondwe downplayed the audit findings, saying they did not necessarily mean theft of public funds but might indicate a failure by certain officers to follow procedures.
In 2014 the Malawi media splashed an Auditor-General’s report revealing that billions of kwacha had been stolen from government through dummy contracts where goods and services were provided at inflated prices – or not at all.
The Cash Gate scandal led to the suspension of direct budgetary assistance to the Malawi government by foreign aid donors who wanted the government to tighten its financial controls.
Despite the arrest and jailing of some officials, the aid ban remains in force. Another audit in 2014 revealed the loss of billions of kwacha through government mismanagement. No remedial action has been taken to date. DM
This story was produced by the amaBhungane Centre for Investigative Journalism.
Photo: Mothers with severely malnourished babies wait for medicine to be dispensed in the Nutritional Rehabilitation Unit at the Queen Elizabeth Central Hospital in Blantyre, Malawi, Friday 14 October 2005. Photo: EPA/JON HRUSA
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