Malawi blames IFMIS for billions in losses

By Gregory Gondwe, Blantyre, Malawi

Malawi’s government has for the past three weeks been hit by discovery of massive looting of billions by officials working at Lilongwe Capitol Hill, the seat of the government, and the officials have since blamed the Integrated Financial Management Information System (IFMIS).

Donors have suspended aid to Malawi while the Germany government has come down hard on Malawi’s excuse over the recent spate of embezzlement of public resources, saying it is wrong to be blaming an IT system for the fraud that is taking place at Capitol Hill.

Germany Ambassador to Malawi Peter Woeste told the local media was quoted by Times Media as saying: “Thanks to the IT-System used – IFMIS – we seem to be able to trace who and where people took money. So please: Do not blame a computer for corruption – that would be a distraction from the real issue. It’s some criminal elements who are committing fraud.”

The Ministry of Finance acknowledged that Malawi government has been losing billions of kwacha through poor financial management system which has led to the suspension of the IFMIS which is government’s payment system.

The local media has reported that Britain, which is one of the country’s donor partners, has flown into the country forensic audit experts who are currently on the ground working with responsible agents to probe the suspended IFMIS to establish how much public money was stolen by looking at auditable files of transactions.

Revelations of major theft came to the open following the shooting of Malawi’s Budget Director Paul Mphwiyo, last month who is currently fighting for his life in a South African hospital.

Since then there have been revelations of how government has been losing money, prompting a fraud and risk management consultant to advise government to change the IFMIS, which is said to be operating on outdated software. The Accountant, General, David Kandoje, said in an interview that the system was not been suspended but it had collapsed and that government was not sure when it would be operational again.

“It has been running on old machines and software and currently we are working on it. It will take a long time before the problem can be rectified,” he said.

Kandoje, however, said the crash will not in any way create loopholes for theft of government money.

“We will be controlling everything from here. Every cheque will be scrutinised here before payment,” he said. “So it won’t be possible to be taken advantage of.”

This was however, trashed by President Joyce Banda who said the system was suspended due to theft and she dissolved her cabinet and dropped the finance minister Ken Lipenga and Justice Minister Ralph Kasambara who has been implicated in the saga when she hired a new cabinet.

The Institute of Internal Auditors (IIA) has encouraged stakeholders to critically look at the system.

In a press statement issued on Friday by the IIA president, Andy Chitete, observed that so far billions in taxpayer’s money has apparently been lost and government has blamed its payment system for the looting.

“IIA notes that when the Integrated Financial Management System (IFMIS) was introduced in government in 2005, there was no training given to auditors, however, they are supposed to provide assurance over the soundness and effectiveness of the system,” he said.

Chitete said the institute notes that Malawi has a number of structures to curb fraud and corruption such as the Anti-Corruption Bureau, the Office of the Director of Public Prosecutions, among others.

“The major reason these are not effective, is that they are ignored due to greed, lack of integrity and ethical morals,” said Chitete.

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