LILONGWE (Tamanda Mwale, Malawi NewsNow) –The Auditor General Mr Stevenson Kamphasa has said his office has on Monday started probing the Malawi Energy Regulatory Authority (Mera) over reports that the organisation diverted K2.964 billion from the Price Stabilisation Fund (PSF) to buy maize for Admarc, the grain marketor.
The Mera board on 24 February 2016 resolved to purchase 10 000 metric tonnes of maize at a cost of K2.964 billion to be sent to Admarc for sale in its markets, according to a letter dated 25 February 2016 from Mera to Secretary to Treasury and copied to Chief Secretary, Office of the President and Cabinet and Mera board chair Mr Dingiswayo Jere.
Mr Kamphasa said the investigations on the matter has commenced, saying under the Public Finance Management Act, government has no mandate to use money without the authorisation of Parliament except in very special cases
“The management of Mera, however, gave the money to Admarc which bought 10000 metric tonnes of maize, which was sold to people,” said Mr Kamphasa.
Finance minister Mr Goodall Gondwe described this as an illegal transaction, saying Treasury did not authorise the payment.
But the letter from Mera informed the Secretary to Treasury about the decision as well as asked for his advice on it.
The donation was made on February 24, according to Mr Kamphasa.
However he refused to give details of the auditing and what his officers have found so far, saying everything will be contained in a report which will be sent to pariament.
The chairman of the Budget Committee of parliament Mr Rhino Chiphiko said what Mera did was unlawful and asked the government to take swift action against the perpetrators.
Said Mr Chiphiko: “As an oversight body, my committee would like government to explain how it arrived at the decision to use funds from the Price Stabilisation Fund for the purchase of maize without Parliament’s approval.
“Why is government funding Admarc, which is a government company? We have approved a lot of money for Admarc. Should we believe that Admarc does not have adequate resources to procure maize, hence the decision to get funds [from Mera]? This is a serious matter which needs ACB to investigate.”