Malawi embassies in Mozambique & South Africa overspending – National Audit Office report

A National Audit Office report has faulted Malawi embassies in Mozambique and South Africa for overspending with about K1.2 billion.

The two embassies are alleged to have irregularly used the said amount of money on personal advances and failure to recover deposits in respect of rent from a property owner among other reasons.

The alarming findings from the Auditor General for the year ended June 30, 2011 reveals glaring failure by controlling officers to follow the public management legislation which stipulates how public funds ought to be spent and accounted for by public officers.

The Public Finance Management Act stipulates, among other things, of the need for each controlling officer to monitor and control expenditure within the ministry or department to ensure that there are no over expenditures or over commitment of funds for unplanned transactions.

“An examination of expenditure returns and the related records for 2008/09 and 2009/10 financial years disclosed that the Mission incurred a total over expenditure of K 21,085,638.98 on budget allocations for the above mentioned financial years.

“There was no evidence to show that authority was sought from the Treasury before incurring the over expenditure,” Mozambique report states.

On irregular granting of personal advances, the report says money amounting to K6.2 was granted to members of staff using funds from the Revenue Account with a view of recovering the amounts once the advances applications were approved by Ministry Headquarters.

“An examination of financial transactions disclosed that the Mission did not follow this procedure. It was observed that advances amounting US$41,084 (K6, 244,768) were granted to members of staff using funds from the Revenue Account with a view to recovering the amounts once the advances applications were approved by Ministry Headquarters.

“It was further noted that some advances were paid even before applications were approved by the Ministry Headquarters. As at the date of audit in September 2010, the above stated amount was still outstanding,” the report says.

The Malawi Embassy in Mozambique is also alleged to have failed to recover deposit in respect of rent from property owner amounting to K456,000.

The report says the embassy in South Africa registered an Over Expenditure On Budget Allocations amounting to K16,675,827.

“It was observed that the office used a sum of K16, 675,827.00 in excess of budget allocation for the year.

“The excess expenditure was caused through use of funds realised from miscellaneous receipts such as property rents and sales of assets. There was no evidence to show that Treasury approval was sought prior to the use of revenue,” The report states.

The report also indicated that an examination of financial transaction disclosed that the mission spent revenue amounting to K55,537,109.53 at source without approval from Treasury.

The embassy is also accused of Payment of Foreign Service Allowance In Excess Of Entitlement to the tune of K29, 702,465.74.

It further says that in South Africa there was lack of direction on local travel rates of allowances at missions abroad.

“A review of expenditure records for internal travel disclosed that the mission management was paying internal travel allowances to Mission staff including drivers and other local staff at the rate of external travel allowance applicable in Malawi, currently pegged at US$180 per day.

“Enquiries made with management at the Mission and Ministry of Foreign Affairs and International disclosed that internal travel by diplomats at Missions abroad was treated as external travel,” the report indicates.

Principal Secretary in the Ministry of Foreign Affairs Patrick Kabambe said in an interview yesterday that the officers did not flout procedures.

“We follow rules and regulations. But if an employee flouts procedures, the ministry deducts money from his or her salary with a surcharge,” he explained.

Kabambe said the embassies sometimes experience over expenditures due to fluctuations of the local currency, and at times auditors do not understand that, but we do explain such issues.”

Audits reports are submitted to parliament for discussions and responsible officers are summoned for explanation.

However, a retired senior civil servant who opted for anonymity argued that the auditors cannot claim there is over-expenditure if there is an issue of currency fluctuations.

He also said currencies like the Rand in South Africa do not experience frequent uncontrollable fluctuations.