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Republic of Malawi

Fourth Briefing On Implementation Progress Of The Government Action Plan To Address ea!nesses In The Public Financial Management "#stems

B# MI$I"T%R OF I$FORMATIO$ A$& 'I(I' %&)'ATIO$"* +O$O)RAB,% BRO $ -AM%" MPI$GA$-IRA

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The 'entral Office of Information

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Frida#* &%'%MB%R* 01./

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I$TRO&)'TIO$

Let me welcome you all to this Briefing on the Action Plan that Government has formulated to address Weaknesses in the Financial Management Systems following recent revelations of massive fraud and theft of pu lic resources! Allow me to e"tend my gratitude to my ca inet colleague# the Minister in the $ffice of the President and %a inet responsi le for Good Governance# &onoura le 'r! %hris 'a(a# who riefed you last week on my ehalf! As Government pledged# this is the )th Media Briefing on the Action Plan# and * am here once again to share with you some progress registered during the past week in the implementation of the Action Plan# ut * will also share with you some other related developments concerning Government financial management! * must reiterate that this Press Briefing is eing made in the conte"t of the $cto er +,-. Action Plan!* am also pleased to inform you# Mem ers of the Press# and the /ation that in the spirit of transparency and accounta ility# ut also in ensuring that as many people as possi le access and track progress of the Action Plan# Government has decided to share the Action Plan and progress reports through various online platform! 0he Action Plan will e uploaded on the Malawi Government we site# MA/A$/L*/1 and Ministry of Finance we site! We are also working towards having the Action Plan uploaded on other private online platforms that are instrumental in information dissemination! $n Wednesday# 'ecem er -.# +,-.# a Ministerial %ommittee that is driving implementation of the Action Plan met to consider overall implementation and progress that has een registered# especially in the past week! Like in all other meetings# 'evelopment Partners were also invited to appreciate what Government is doing to address challenges in its financial management systems! And * am pleased to inform the /ation that oth the Government and the 'evelopment Partners are pleased with the progress so far# which has clearly indicated the determination of President 'r! 2oyce Banda and her Government to root out corruption fraud and theft of pu lic resources# that had een entrenched in our systems for a long time! *t is in the same vein that a num er of 'evelopment Partners have in the past week announced various aspects of financial support to the Government and the People of Malawi! 0he 1uropean 3nion has provided us with 1uro 4!5 million 3about 4520 billion6 that is aimed at strengthening Malawi Government6s Pu lic Finance Management systems!
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0he German Government has also pledged to support Malawi Government6s current efforts in improving pu lic finance management with a financial package of 1uro 4!8million 3about 452. billion6# and 1uro 8!, million 3about 4/ billion6that will go towards Safe Motherhood and Maternal &ealth! 0he agreement will e signed this afternoon!

0he British Government has -+ th 'ecem er +-,. released British Pound ) million 3about 4027 billion6 that will go towards the Farm *nput Su sidy Programme seed component! 0he /orwegian Government has also released 3S dollar 8 million 34020 billion6 towards the &ealth Sector! *t has also released ),milion /orwegian 9roner for humanitarian support! 0hey have also released 3S4!5 million for the purchase of drugs!

0he African 'evelopment Bank :Af'B; has approved a loan of 3S dollar <8!, million 3about 40829 billion6 and a grant of 3S dollar =,,#,,,:a out 9.=< million; for Malawi6s participation in the Multinational /acala >oad %orridor 'evelopment Pro?ect Phase *@! 0he money will e dis ursed soon! 0he 2apanese Government has also released 9+!< illion for the completion of the construction of the %hipem ere &ighway in Blantyre and it has also released 98!5 illion for the construction of Lilongwe Secondary 0eachers 0raining %ollege!

Let me# on ehalf of the Government and the people of Malawi e"press our gratitude to our 'evelopment Partners who have shown confidence in the efforts that Government has put in place to address the challenges to address weaknesses in its financial management systems! @arious 'evelopment Partners are also supporting aspects of the Action Plan!

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PROGR%"" R%GI"T%R%& I$ T+% IMP,%M%$TATIO$ OF T+% A'TIO$ P,A$ A" OF /R& &%'%MB%R 01./

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As * have already stated# Government has since $cto er# +,-. een implementing the Action Plan as well as other additional measures to ensure that financial management systems are strengthened! As we are all aware# the Action Plan has lined up over <, measures that will e implemented in the short to long term to address oth issues concerning recent cases of theft and fraud in the Pu lic Service as well as put in place long term measures to strengthen the financial management systems and avert any occurrences of theft# fraud and corruption in future! Let me now take you through the progress that has een registered in the ma?or areas of the Action Plan namelyA *nvestigations and Prosecutions# Auditing# Accounting and Administrative Measures! a2 Investigations and Prosecutions 0he Ministry of 2ustice through the $ffice of the 'irector of Pu lic Prosecutions is now ready to go to trial with 4 cases! 0he Ministry is in the process of preparing witnesses and working on dates for preB trial hearings! Let me report that the Ministry of 2ustice# the Malawi Police Service and the AntiB%orruption Bureau continue making su stantial progress in their investigations and prosecutions! Most of the cases are ?ust awaiting trial to commence in accordance with the +-Bday court reCuirement for service disclosures! 0rial of these cases is e"pected to egin in 2anuary# +,-)! %ommitment of cases to the &igh %ourt through the 'PP remains .8 cases and -4 cases are pending committal to &igh %ourt through the A%B! 0he A%B continues to restrict access to related ank accounts and the disposal of such properties as houses# vehicles and land under investigations# as well as profiling of property connected with suspicious transactions!

&owever# let me point out that there are still some challenges that must e overcome such as competition for court space with other eCually important cases that the 2udiciary is handling# as well inadeCuate capacities# oth human and financial! $ur 'evelopment Partners are doing their est to offer support so that implementation of the Action Plan is on track and that it produces desired results! Already# the /orwegian and American Governments have offered technical support! 0he /orwegian Government has provided an
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investigator to work with the Malawi Police Service# ut more technical support will e provided to Malawi Police Service in due course! 0he American Government has facilitated volunteer support to the A%B through the *nternational Senior Lawyers Pro?ect! 0wo volunteer lawyers are already in the country!

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Auditing

Dou may recall that during the last riefing# Government reported that it had introduced *ndependent Audit %ommittees for Government Ministries# 'epartments and Agencies! 0he announcement has generated considera le interest and support from the private sector and professional odies such as the *nstitute of *nternal Auditors! 0he *nstitute has already proposed some names of professional auditors to e included in these audit committees! So far there has een =< percent acceptance from successful *ndependent Audit %ommittee mem ers and presently an orientation of all Principal Secretaries is eing arranged to appraise them on this new initiative! Government intends to strengthen the role and functions of the %entral *nternal Audit 3nit! 0raining and %apacity Building initiatives of the 3nit will commence in 2anuary with support from the World Bank6s Financial >eporting $versight and *mprovement Pro?ect :F>$*P;! Let me report also that the forensic audit of Government transactions processed through *FM*S is on track and as already announced# an interim report is e"pected y end of 2anuary# +,-)! Meanwhile a high level rief of the audit will e released y end 'ecem er +,-.! Government is strategi(ing for a comprehensive forensic audit of the *FM*S from +,,8 when the system was introduced! c2 Accounting $n Accounting# Government has floated an advert for an *%0 Security $fficer position in the local newspapers# and * am sure most of you have seen this advert! Government intends to recruit this *%0 Security $fficer soon# and this is supported y the German Government! 0he 1uropean 3nion is assisting Government engage consultants that will carry out an *ndependent verification of the *FM*S system as well provide oversight and preBaudit services! 0he 13 has finalised evaluation of the
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offers and has since selected two firms! 0he results of the evaluation are ?ust awaiting 13 internal approvals!

$ne firm will e responsi le for preBauditing and the other one will e for strengthening of internal controls and procedures! *t is e"pected that the consultants will commence work y midB2anuary +,-)! 0he %onsultants will work closely with the %entral *nternal Audit 3nit! Let me also report that an audit e"ercise of all manual transactions that were carried out when the *FM*S was shut down has commenced# and an audit report of this e"ercise is e"pected y the end of this month of 'ecem er! Let me also take this opportunity to once again inform the nation especially %ivil Servants a out efforts that Government is doing to ensure that their 'ecem er salaries are paid out in good time# as they will e going on leave of a sence from Monday# 'ecem er -<#+,-.! 0he Accountant General6s 'epartment is working tirelessly to ensure that %ivil Servants are paid their 'ecem er salaries in good time efore %hristmas! Some Ministries and 'epartments have already started getting their 'ecem er salaries# and the Accountant General6s 'epartment has made a commitment to ensure that y Friday# 'ecem er +,# +,-. ALL %*@*L S1>@A/0S A>1 PA*' 0&1*> '1%1MB1> SALA>*1S! 0he delays in paying out the salaries# especially in /ovem er and 'ecem er# have een necessitated due to prolonged configuration of new user rights in the *FM*S and the ongoing proof testing of the system! *n addition to the a ove systemBrelated pro lems# another pro lem has een the delay y Ministries in su mitting users to e entered into the system following revocation of all old user rights! &owever# let me assure all %ivil Servants that the Accountant General6s 'epartment is doing everything possi le so that %ivil Servants are paid efore %hristmas! Let me appeal to all Ministries and 'epartments to speed up su mission of relevant documentation to e"pedite the preparation of 'ecem er salaries! 0he Accountant General6s 'epartment is one Government offices that will not close down until all %ivil Servants are paid their 'ecem er salaries! Let me# therefore# appeal to %ontrolling $fficers in all Ministries and 'epartments to follow up with the Accountant General if there are any pro lems in their Ministries and 'epartments!

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*n order to have a long term solution to accelerated salary payment Government is strategising on linking the &uman >esource *nformation Management System and the *FM*S! d2 Reforms

&er 1"cellency# the President 'r! 2oyce Banda has assented to the Pu lic $fficers :'eclaration of Assets# Lia ilities and Business *nterests; Bill and it is now a law! 0he final process for this law to take effect now is its ga(etting! 0he Ministry of 2ustice and %onstitutional Affairs is liaising with Parliament to have the law ga(etted so that it comes into force! /21 'O$',)"IO$

Mem ers of the Press# as you can see from this progress report and the other three reports that have een made# Government is very committed to fighting corruption# fraud and theft of pu lic resources# and ensure that pu lic financial management systems are strengthened! Government strongly condemns any acts of fraud and corruption in its Ministries# 'epartments and Agencies# and has waged the deli erate cleanBup fight! Government will ensure that the *FM*S is strengthened to avert any future fraud# everyone involved is rought to ook and the resources stolen and lost are recovered where possi le! As pledged# Government will continue riefing the nation a out progress eing made in the implementation of the Action Plan!Although Government offices will close on 'ecem er -<# +,-. to 2anuary <# +,-)# work towards implementation of the Action Plan will continue and if there will e need to inform the /ation a out some developments during this period# * will e doing so! Let me once again commend the 'evelopment Partners for their keen interest and support towards Government6s efforts to strengthen the Pu lic Financial Management Systems! * thank you for your attention and *# and my &onoura le %olleagues can now take any Cuestions that you may have!

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