Government of Malawi Action Plan - 27 November 2013

8/12/2019 Government of Malawi Action Plan - 27 November 2013

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MALAWI GOVERNMENT ACTION PLAN TO IMPROVE PUBLIC FINANCIAL MANAGEMENTAS AT 26THNOVEMBER 2 13

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RESULT AREA ACTION TIMELINE RESPONSIBLE

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1. INVESTIGATIONS AND

PROSECUTION

S

1.1. The Director of Public Prosecutions (DPP)to set up a dedicated team to respond tothe requirements of the investigators.

X DPP MG Done

1.2. Analysis and isolation of possible chargeswhich are likely to be proffered on thesuspects.

X X DPP/ACB MG On- going

1.3. Investigators and prosecutors from Anti-Corruption Bureau (ACB), Police,Financial Intelligence Unit (FIU), MalawiRevenue Authority (MRA) and Director ofPublic Prosecutions (DPP) strategize onhow to approach these issues.

X

DPP MG On-going

1.4. Strengthening of DPP office by engagingTechnical Assistance (short term and longterm).

X X DPP Shortterm TA EU

Long termTA yetto beidentified

Short term TA expert in fraudand corruption cases, MrKamdoni Nyasulu, has been

engaged for three months.

This has been done withfinancial support fromEuropean Union

Challenges

Financial and human


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resources Mobility

1.5. Set up forensic investigation unit withinACB to work with all key stakeholders onthese emerging issues.

X ACB MG Done

1.6. Verification of all deleted (suspicious)transactions with suppliers of goods andservices.

X X ACB/DPP/AGD World

Bank

On-going

1.7. Profiling properties of public officersconnected with the suspicioustransactions.

X X X ACB MG On-going

The Bureau continues toprofile properties of suspectswhich include houses,vehicles and farms

So far we have identified 81companies in connection withthe investigations and 60 ofthese have already beenprofiled

Challenges


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Timing for cases in court asthere are other competingcases

1.8. Beefing up the investigation team at ACB. X ACB MGFurthersupportrequired

Done

Staff moved from ACB satelliteoffices.

1.9. Elevation of the corruption cases to highcourt (where there are more competenciesthan in the lower courts).

X X DPP/ACB MG On-going. Over 35 persons committed to

High Court through DPP

32 bail applicationsprocessed, 6 cases committedto High Court and 18 casespending committal to High


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Court (on the Cash Gate)through ACB

15 Suspects on bail on theK400 million AccountantGeneral Case

1.10. ACB dialogue with Judiciary to prioritisethe corruption cases.

X ACB MG Done

Dialogue held on 23rdSeptember 2013

1.11. Identification and follow up of componentsof cases that are ready for prosecutionand effecting arrests.

X X X ACB/DPP MG On-going

Already filed charges for someof the cases.

Over 35 persons committed toHigh Court through DPP

32 bail applicationsprocessed, 6 cases committedto High Court and 18 cases

pending committal to HighCourt (on the Cash Gate)through ACB

15 suspects on bail withregards to the AccountantGeneral K400 million Case

Refer to separate report


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provided

1.12. Strengthening of the Fiscal and Fraud Unitof the Malawi Police Service bydeveloping capacity in investigations

X X X Police Fundingyet to beidentified

Financial and Technicalassistance required

1.13. Develop capacity for tackling cyber basedcrimes

X X X Police Fundingyet to be

identified

Police currently has nocapacity to handle cyber

based crimes Financial and technical

assistance required

2. AUDITING 2.1. Internal review meeting to prepare for theforensic audit.

X NAO MG Done

2.2. Develop TORs for the forensic audit. X NAO DFID Done2.3. Engage a fact finding short term expert. X NAO DFID Done

Initial comprehensiveassessment of the IFMIScontrol and operationalsystems and identification ofareas of significant risk offraud and abuse was carriedout. This helped in defining the


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scope of the second phase(preliminary forensic audit)

Report produced and ACBalready has started acting on it

Way forward

A Reference Team wasformed to provide regular

support to the consultants andmonitor progress on the audit

Members of the ReferenceTeam include NAO (Chair),FIU, ACB, Police, DFID, BHCand World Bank

2.4. Undertake preliminary forensic audit X NAO DFID Audit is underway Covering 6 months from April

2013 to September 2013. This

could be extended to cover 90r 12 months i.e. coveringadditional 3 or 6 months inthe previous fiscal year

Information gathering anddata analysis, which willprovide clues in how themisappropriation of cash was


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carried out, is in progress

The report is expected inJanuary 2014.

The Auditor General has alsotaken on board theinvestigation of the K400

million.

2.5. Undertake comprehensive forensic audit. X X NAOFundingyet to beidentified

ToRs have been developed The situation is being

reviewed to accelerate thecommencement period forcomprehensive Forensic Auditwork to be in January 2014other than June 2014previously reported. The

Initial discussion betweenTreasury and Auditor Generalon the funding either frominternal sources or fromDevelopment Partners willcommence this week andonce agreed will immediately


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facilitate the realistic date forcommencement of theforensic audit.

2.6. Identification of understudy team withinthe NAO.

X X NAO MG/DFID??

On- going

The NAO Team was alreadyidentified and is working

alongside the ForensicAuditors. The team shall beincreased to ensure smoothtransfer of skills. This will bein the next phase ofcomprehensive Forensic

Audit.

2.7. Transfer of the forensic audit skills. X X X NAO/Consultant WorldBank

The plan of transferring ofskills is being worked out sothat next phase of the

comprehensive forensic auditup to 2005 should be in place.This coincides with theappointment of the consultantunder FROIP whose terms ofreference are similar to thoseapplied in Forensic Audit.

Among others to train staff on


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usage of Audit ManagementSystem Software andComputer Aided AuditTechniques (CAATs) tointerrogate the IFMIS softwaresystem.

2.8. Procure audit management system. X NAO/FROIP WorldBank

Once the consultant is in placeit is one of his responsibility inorder to procure the IT AuditSoftware and train staff on itsusage to commence byDecember, 2013

2.9. Undertake spot/surprise audits X DFID This will be covered on adhocbasis to facilitate surprisechecks on IFMIS and will infuture be a continuous

process once the staff istrained on uses of AuditManagement Systems andCAATs by December, 2013.

2.10. Acquisition of Computer- Aided Audit X NAO/FROIP World CAATs to be procured under


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Techniques (CAATs) Bank FROIP

2.11. Introduction of Independent AuditCommittees

X X X OPC $261,622

Fundingyet to beidentified

On-going

Decision already approved OPC to issue circular by 27th

November, 2013

2.12. Strengthen the role of Central InternalAudit

X X CIAU World

Bank

Capacity building on going under

FROIP e.g. IT auditors

2.13. Institutionalize pre-auditing X CIAU/AGD MG CIAU to design somechecklists/reports and providecoaching to MDAs by mid-December, 2013 [Non auditingstaff to be doing this function].

2.14. The Auditor General to table all reportsfrom investigations and special audits inParliament for action by PAC as soon asthey are released.

MG The reports shall be availableas soon as they are itfinalized. They are expected tobe ready as a preliminary

interim report by December,2013 but the final to bepresented to Parliament inJanuary, 2014

3. ACCOUNTING 3.1. Engage the systems supplier, SofTech, to X AGD World Done and the exercise is


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collate all suspicious transactions thathave been tempered with in the system

Bank continuing.

The supplier was engagedand has assisted in therecovery of suspectedfraudulent transactions for themonths of July to September2013.

Way Forward An interim report is being

finalised and will be submittedto OPC by end of November2013

3.2. Recover all the transactions that havebeen deleted in the system

X X AGD WorldBank

On-going

Deleted transactions from Julyto September 2013 have beenrecovered and restored back

into the system. The affectedinstitutions will register overexpenditures that may affecttheir future paymentprocessing.

Way forward


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The AGD and Treasuryengage on how to remedy theover expenditure situation.

The confirmed loss to beprocessed through the legalsystem

3.3. Review the systems security gaps andrecommend areas of improvement X AGD WorldBank Done A preliminary report has been

submitted. Security features enhancedWay forward

For accountability purposes,Government and Softech tosign of all the system

enhancements.

There is need to conduct athorough Penetration andvulnerability Testing for theIFMIS and Interfacing withgovernment wide systems.


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3.4. Engage the system supplier to implementthe security recommendations andenhance system controls

X X AGD WorldBank

Done

Access rights have beenallocated at user level asopposed to group levelpreviously.

Restrictions have been madeto only allow users to haveaccess to modules/ areas ofthe system where they havebeen granted access

Processing of all transactionshas been centrally configuredto be carried out at CapitalHill. However, the remote sites

of Mzuzu, Blantyre and Zombawill be generating vouchers ,printing cheques at theirrespective sites;

Remote access to thedatabase has been disabledtherefore no transaction can


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be deleted from the system.Users will only access thesystem through a web consolethrough citrix.

Way forward

Malawi Defence Force andState House will be engaged

to have their transactionsprocessed centrally at CapitalHill. Alternatively, astandalone system should beimplemented.

3.5. Enter into Service Level Agreement withSoft-tech for provision of functional andtechnical support including overseeing ITfunctions with skills transfer to localofficers

X WorldBank/GIZ?

Drafting a Service LevelAgreement

3.6. Re-opening of IFMIS X AGD MG Done. Circular on allocation of user

rights issued


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granting access rights. Accesswill be granted after necessaryapprovals have been made

3.10. Issue a circular to all MDAs on controlssurrounding processing of transactions inthe system

X AGD MG Done.

A circular reference numberOA/1/15/13/270 dated 19thSeptember 2013 was issued

by the Secretary to theTreasury

Circular issued by AccountantGeneral

3.11. Issue and enforce internal circularemphasizing controls surroundingpayments and printing of cheques within

Accountant General Department.

X AGD MGDone

3.12. Improving competencies of accountingofficers

X X AGD World

Bank

AAT UK has been engaged to

conduct training using localinstitutions to enhance ethicalaccounting principles

Way forward,

An MoU between GoM andICAM and AAT to be signed


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by December 2013

3.13. Improving competencies of relevant ICTofficers.

X X AGD / E-Government

Dept.

WorldBank

A training program has beendeveloped and submitted toFROIP for financing. However, thetraining programme has to be re-re-visited in view of the currentchanges at AGD

3.14. Develop a comprehensive capacitybuilding plan for the team that issupporting the system

X AGD WorldBank

A training program has beendeveloped and submitted toFROIP for financing. However, thetraining programme has to be re-visited in view of the currentchanges at AGD

3.15. Reconciliation of all Government accountsat RBM and commercial banks byDecember 31, 2013

X AGD MG/WorldBank

On-going

Way forward A team currently working to

clear backlog of bankreconciliation and futuretransactions in IFMIS on adaily basis.


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A consultant being engagedthrough FROIP to assist AGDteam to set up a framework forbank reconciliation afterclearing the backlog. ToRs forthe consultant are beingdrawn. The Consultant will beplace early January 2014

3.16. Embark on daily bank reconciliation X X X AGD MG Way Forward Engage RBM to provide bank

statements on a daily basis

3.17. Circulate daily IFMIS- generated chequelist to RBM and commercial banks.

X MG Accountant General and RBM toreview the MOU including thebanking arrangements

3.18. Develop and implement IFMIS ICTSecurity Policy

X AGD MG/GIZ

Way forward,

Set a task force and engageconsultants on IFMIS SecurityPolicy by December 2013


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3.19. Improve dialogue between RBM,Accountant General and Treasury

X X X AGD MG On- going.

Meetings have alreadycommenced

3.20. Implement systems to enforce ceilings offunding with IFMIS and Reserve Bank ofMalawi.

X AGD, RBM,Ministry ofFinance

MG Way forward

Put up proper structures forsegregation of duties between

AGD, Treasury (BudgetDivision) and RBM includingappropriate internal controlsand risk managementprocedures

3.21. Implement new enhanced IFMIS X AGD WorldBank

1stJuly 2014

Business Process Re-engineering has beenconcluded

Functional requirementsbased on the revised businessprocesses have beendeveloped

An evaluation of potentialIFMIS solutions Epicor andSerenic Navigator applications


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have been concluded

Way forward,

Make recommendation togovernment of a new IFMISapplication

3.22. Independent verification of the IFMISsystem

3.22.1.Appoint 4- 5 consultants to theAGD to provide oversight and pre-audit services

X EU EU has offered to finance thisaction point. The independentconsultant will work with a teamcomprising officers from CentralInternal Audit Unit.

3.23. Carry out an independent audit forpayments made during the tenure of themanual system by end December 2013

X $60,000


Central Internal Audit Unit to carryout the audit as soon as thefinancial resources are madeavailable.

3.24. Verify the end June stock of arrears andmonitor thereafter

X MG


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4. ADMINISTRATIVE MEASURES

4.1. Take disciplinary action on officersimplicated including interdiction anddismissal in line with the MPSR

4.1.1.Disciplinary action, includingsuspension and administrativeinquiry, against the approvers offraudulent payments and cheque

signatories

X X X HumanResource Units

in variousministries

MG On-going.

Upon being arrested bylaw enforcement agenciesand charged by courts oflaw, suspects areinterdicted without payuntil their cases are

concluded

4.2. Re-deployment and rotating of staff withinthe civil service.

X MG

A number of postings effected Some officers are being

posted to fill posts in ministrieswhere suspects have beeninterdicted to close gapscreated

In certain cases, some civilservants whose roles are notvery clear or whereinvestigations are on-going, orwhere negligence has beenproved.

Officers are posted to otherministries to pave way for full


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Conduct was produced andlaunched during the Public ServiceDay in June, 2013 and will beused during orientation.

4.6. Independent oversight on theimplementation of this action plan

4.6.1.Establishment of credible andeffective feedback mechanisms toallow independent monitoring andevaluation of progress achieved inimplementing the action plan

Irish?? TORs for the independent verifiersdeveloped

The Ministerial committee to

endorse the TORs

5. REFORMS 5.1. Accelerate the implementation of thePublic Finance and EconomicManagement (PFEM)Reform Program

X X X Ministry ofFinance

WorldBank/

AfDB/GIZ

On-going

5.2. Money laundering Act amendmentincluding civil assets forfeiture regime

X FIU/Law

Commission/Justice

MG On-going

Process already started with adraft in place

Core Team to meet end ofNovember.

5.3. Set up a Forfeiture Unit in the DPP office X DPP/DHRMD MG/DP On-going


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5.4. Enforce the Malawi Public Service Codeof Conduct

X OPC/DHRMD MG/UNDP

On-going

Controlling Officers, with theguidance by the Departmentof Human ResourceManagement andDevelopment and theDepartment of Public Sector

Reforms Management, areencouraged to orient their staffon the Code.

The new office of the Ministerof responsible for GoodGovernance will take the leadin advocating ethicalbehaviour by Public Servants.

5.5. Initiate a process of the law reviewincluding protection of whistle blowers

X X X ACB/LawCommission

MG

Furthersupportrequired

On- going

A law review process hasbeen initiated and asubmission has been made toMinistry of Justice forprofessional scrutiny


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Lobbying with the LegalAffairs Committee ofParliament done

5.6. Strengthen enforcement of FinancialManagement Accountability of ControllingOfficers and other heads of Departmentand Agency, as well as enforcing personal

accountability for wrongdoing in line withthe Public Finance Management Act,Public Audit Act, and Public Procurement

Act.

X X X OPC MG


All Principal Secretaries andControlling Officers shall begiven copies of the laws andoriented in the provisions of

the tree Acts Independent Audit

Committees will beestablished and rolled out

Candidates have beenidentified

5.7. Tabling of the Assets Declaration bill Justice MG DoneAssets Declaration bill was passedin Parliament

5.8. Restriction of accounts and move towardsasset recovery

X X X ACB MG

Furthersupportrequired

On-going

50 bank accounts involved inillegally transactingGovernment cheques have sofar been identified andrestriction is underway


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AC continues to restrictaccess to related bankaccounts and the disposal ofsuch properties as houses,vehicles and land underinvestigations

Documents

Government of Malawi Action Plan - 27 November 2013