Services who were working on
methodologies on the reconstruction of the cashbook in the wake of audit query for the K92 billion (US$204.4 million) mismanaged under the watch
of the first Democratic Progressive
Party (DPP) administration led by
former president the late Bingu wa Mutharika, have recommended
comprehensive forensic audit.
In the report to the National Audit
Office of Malawi, PwC has called for further investigations of ministries and departments covering the period
between 2005 and 2012.
Director of PwC, Lionel Van Tonder said in the report seen by Nyasa Times that the content of the data analysis is for “information purposes only and may not form the basis of any criminal, civil,
disciplinary or any other actions
against any party/ies.”
The auditors recommended that the “variances” identified pertaining to the reconciliation of bank statement transactions to cashbook transactions need to be further investigated.
“The daily reconciliation performed on the Epicor system, matching electronically received bank statements to the previous day’s cashbook, needs to be reviewed.
This is a potential control weakness and more comprehensive controls need to be architected to identify possible
irregular transactions or ‘red flags’ as they occur,” reads part of the report recommendations.
PwC recommended that the variances of the number of transactions on the bank statement versus the number of
payments on the cashbook be
reviewed and that the daily
reconciliation of cashbook to bank
statement process also be reviewed.
“It should be considered to recover all deleted and/or modified database records in order to reconstruct the
Cashbook [for the period following March 2010],” recommended PwC.
The auditors noted that the exercise will be “extremely lengthy and complex “as the Auditor General will have to
work through millions of transaction logs to further understand the movements of the database.
“The complexity of this task justifies a separate submission which we will do if required,” PwC said in the report.
Identifying what they called “red flags”, PwC stated that suppliers and users reated data on one day but deleted either the same day or deleted the following day,
They also pointed out that payments, vouchers and invoices were being created and deleted on the same day. PwC states that the “anomalies should be further investigated to identify the
extent of the suspected irregular
Malawi’s Auditor General Steven
Kampala said the released data analysis report is a first step towards a full forensic audit which would take
approximately 10 months.