a foreigner’s take from inside the Malawi budget office
There wasn’t much for me to do when I first joined the Budget Division of Malawi’s Ministry of Finance back in 2006… One of the very first things I worked on was an attempt to reconcile the difference between expenditure ceilings set by my department and actual reports of expenditure from the Accountant General’s department.
“paying for gas in Malawi” by skuarua, shared with cc license via Flickr
I quickly noticed that IFMIS-generated reports seriously deviated from what was being approved by the Budget Division, sometimes even showing expenditure which was above and beyond what had been mandated by our department.
At my director’s prompting, I visited the relevant department at the Account General’s to request more detailed reports from IFMIS. The likely culprit was some
ofdata problem, and I was curious to get to the bottom of it, seeing the whole exercise as a problem with some sort of technical solution. While the civil servants I spoke to at the AG were friendly enough and agreed to send me reports, upon my return to the Ministry of Finance it was later made clear to me that the AG wasn’t too fond of this unknown fresh-faced mzungu making random requests. Not long after, more pressing work diverted my attention, and this particular issue faded into the background.
Matt writes these reflections in the wake of Malawi’s Cashgate scandal, where evidence continues to mount on the great theft of public funds through the IFMIS.
There is one excerpt in particular from Matt’s blog post that stuck with me:
…when finance systems don’t work properly, it’s very difficult to tell the difference between corruption and incompetence.
That bit underscores an important challenge in investigating financial discrepancies: do you accuse someone of being clever (and stealing) or stupid (and not equipped to do a job)? Either way, you’re insulting someone. That’s not an easy situation to be in when you’re a foreigner — and that’s one reason why the fact that forensic auditors are being flown in from Britain sits a bit uneasy with me. I try to think about how governments of developed countries deal with financial irregularities — I can’t remember a recent scandal where forensic auditors from another country were flown in. I recognize that pervasive cases might require external (non-governmental) auditors, but how “external”? Does it require auditors from outside the country (international auditing firms have branches in Malawi)? If so, would a group of Zambian auditors not be far enough removed? Why does corruption in Malawi require British oversight in the postcolonial period?
haba na haba 
Malawi used Coda (acquired later by Unit4) as the IFMIS in 2006. Malawi now uses Epicor ERP as the IFMIS (using the Tanzania government model).
Off the shelf ‘Commitment Accounting’ systems used in government prevent overspending the budget. It is unclear how this overspending could be allowed. Is there a lack of automated controls? (in both systems? In Malawi and Tanzania?) Are there informal workarounds?
It’s unclear at this time just how the overspending could have happened. I think Matt’s insights are helpful because even if the technical systems might have changed, the framework in which those systems are employed probably changed very little.
I expect we’ll learn more about the details of the scandal (or, at least, we’ll hear some explanation) in the run-up to the elections in May. I don’t think the president could run a successful re-election campaign if she doesn’t provide some answers.
Hi Kim,
Not that you’re doing it here, but I want to be cautious about drawing too many conclusions from my (very brief) interaction with the AG’s system – the Cashgate scandal is another animal entirely (as Doug points out, the systems have changed – budget was just starting to adopt Epicor when I left). In weighing the corruption or incompetence possibilities, it’s highly likely that my situation fell int he latter.
I just felt it was worth noting that these things aren’t always clear, and that there was a bit of an administrative wall between the Account General’s Office and the Budget Division of the Ministry of Finance (they were, at least when I was there, separate `votes’ on the cabinet and in separate buildings.).
Also, for the sake of my former department, I want to make it clear that this thing at least seems to be entirely of the AG’s making, and I saw nothing in the Budget Division during my time there that suggested any wrongdoing of this sort.
Cheers,
Matt