Africa-Press – Zambia. It all started in September 2021 with the allegations that the Ministry of Finance was running a secret and parallel account. The Anti-Corruption Commission (ACC) also confirmed that it was investigating a matter involving an alleged secret and illegal account at the Ministry of Finance purportedly used to siphon millions of Kwacha.
The Ministry of Finance immediately denied knowledge of the existence of any secret and illegal account that was reportedly being maintained parallel to the legal payment system in the country.
The Ministry of Finance stated that it only had one paying bank account, the Single Treasury Account(STA) through the Integrated Financial Management System only after which any person, persons or recipient entity can receive the payment through the Real Time Gross (RTG) settlement system housed at the Bank of Zambia.
The established and authorized payment processes for the government are planned, approved, authorized and pre-audited by internal auditors before a post-audit by the auditor general while payments for allowances are made to individual bank accounts to maintain payment trails for the government account.
SO WHERE IS THE FRAUD? ● Authorities for the payments was drawn from the Public Finance Management Act No.1 of 2018, Section 7 (1) (g), and (z), and Section 86 and 87, the Secretary to Cabinet, Secretary to Treasury and Permanent Secretary.
● the allowances were paid as a condition of service.
● The allowances at the centre of the so called scandal represent allowances paid to Permanent Witnesses ( The Auditor General, Secretary to Treasury, Controller of Internal Audit and Accountant General ) and support staff helping on the various work of the Parliamentary Accounts Committee(PAC), Committee on Local Authorities and Committee on Parastatal Bodies covering the from 2019-2021, although these allowances have been paid since 2013 and from 2021 to date.
● Payments were made to persons at both National Assembly, Ministry of Finance and National Audit Office.
● Documents show that all the payments have authorities as prescribed by law and from written authorities from the Clerk of the National Assembly, Secretary to Cabinet, Secretary to Treasury, Permanent Secretary and others.
● All transactions were duly authorized by multiple authorities.
● All allowances were signed for.
● the IFMIS system at the centre of all payments cannot be manipulated and the system DOESN’T delete any activities as designed.
● Other payees have conveniently been excluded from both investigations and arrests and will show later.
TO UNDERSTAND THE ALLEGED FRAUD REQUIRE THAT WE UNDERTAND AND LOOK AT THE IFMIS PROGRAMME
The IFMIS -Integrated Financial Management Information Systems is an electronic payment platfotm and was adopted by Government as an Enterprise Resource Planning (ERP) tool in order to help the Government plan, allocate and report on the Revenues/Expenditures.
The procurement of the design, supply, installation, configuration and training of the IFMIS was supported by the World Bank under the Public Sector Management Support Project for Zambia.
The purpose was to make public service delivery, institutions, and processes more effective and efficient and accountable in the use of public funds and public Expenditures to support poverty reduction, job creation and economic growth.
The IFMIS system has modules that are used to execute the different government programmes and the officers also play different roles. To make the system foolproof, no one Officer can perform all roles or functions.
THE IFMIS STEPS
□ For a payment to go through, there should be a budget and there should be funding on a particular budget line. □ After all is done (Authorities) outside the system a payment will be introduced into the system, called parking (same as writing a payment voucher).
□ Completing (checking the correctness of what has been parked including the budget lines used).
□ Internal Audit will go through as a control measure to the budget line and the activities are seating well.
□ Releasing is then done.(authorization of Voucher).
□ After the above stages, an officer with the role of producing the open item report (list of payments in old language it would be called a Backing Sheet).
□ Again Internal Audit will have to authenticate the list, then the signatories will sign, one from Panel A (Finance Person)another from Panel B (administration), then the Controlling Officer ( Permanent Secretary) will be the last to sign as he/she the one answerable for all expenditures under his/her charge.
□ The open item report is taken to Treasury Management, where transmission is done to individual accounts.
The IFMIS here is interfaced with the Bank of Zambia System so that the transmission to individual accounts is straight through, unlike in the olden days where money was first transferred to a Commercial Bank then to various beneficiaries.
□ The current system uses the Real Time Gross Settlement (RTGS). All these developments were done with a view to improve efficiency and transparency.
The advantage of the IFMIS programme is that by a click of a few buttons Government is able to know the Revenues and Expenditures on programs, and proves very easy for national budget tracking.
Through the IFMIS, government has managed to produce the Financial Report on time in accordance with Article 211 of the Republican Constitution.
CONCLUSION
The IFMIS payment processes require multiple authorities and the system is designed to hold records without deletion even by a super user. Clearly any fraud using this system would be foolhardy as it documents, archives and keeps all financial records.
The troubling matter is the selective approach in which this entire matter has been handled which leaves others in their jobs while suspciously suspending others. The best is to produce both the entire list of all those that authorized these allowances and the list of all the beneficiaries.
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