MK 61 Million Cash Gate Hits Nkhoma CCAP Synod :Money Siphoned From USAID Project
A church which has endorsed criminals Joyce Banda and Lazarus Chakwera of Malawi Congress Party has been embroider in a multi million Kwacha cash gate.
Cash gate at Nkhoma synod
United States Agency for International Development (USaid) is now demanding that the CCAP Nkhoma Synod should refund money amounting to K61 886 389.11 siphoned through fraud that hit a water, sanitation and hygiene project USaid financed and which the church was implementing.
Actually, Nkhoma Synod general secretary the Reverend Vasco Kachipapa says “the church is in shame.”
Meanwhile, 21 church ministers have written to church faithful to force the current leadership to step down in the wake of the fraud happening on their watch.
According to USaid, eight of the synod’s employees in the church’s relief and development department where the money was misspent—confessed to the donor agency of fraudulent activities that hit the project.
Ironically, this project was headed by “a man of God, a reverend”, according to information from the synod.
USaid has confirmed that it is demanding a refund of the stolen money with interest. On the other hand, several CCAP Nkhoma Synod faithful have also spoken of church ministers begging for more contributions from them—a drive church members suspect is a fundraising venture to pay-off the squandered money to USaid.
–pay back the money–
In an e-mail interview, USaid Malawi Mission director Doug Arbuckle said “USaid Malawi expected the payment by the due date of March 8 2014”.
But Nkhoma Synod was yet to meet the demand as we went to press yesterday—more than two months after the deadline.
Said Arbuckle: “USaid issued an award to Nkhoma Synod Relief and Development [NR&D] to support its Safe Water, Sanitation and Hygiene Project on February 24 2011 in the amount of $1 800 000 [K720 million].”
The project—meant to be implemented over a period of three years up to February 23 2014—was already fraught with irregularities within a short period, according to a USaid financial review of the project conducted in April 2013.
The review, among others, discovered fraud through, for example, questionable charges and officers getting unwarranted allowances.
“USaid Malawi determined that NR&D had not implemented the required financial management improvements which were a condition for issuing the award. USaid also identified several deficiencies in NR&D’s management of the project. These deficiencies resulted in questionable charges to the project and possible fraud. As a result, the mission requested the USaid Office of Inspector General [OIG] to investigate,” explained Arbuckle.
The project was subsequently suspended on May 3 2013 pending further investigations, whose report “concluded that there was substantial evidence that fraud had occurred.”
“Eight NR&D employees admitted improper use of funds,” according to the report, which we saw.
Consequently, USaid Malawi issued a project termination notice to Nkhoma Synod on February 5 2014 and “a bill for collection on February 7 2014 based on these findings.”
A bill of collection is basically a demand for refund and “USaid has informed NR&D of the need to repay a total of K61 886 389.11.”
USaid Malawi has subsequently met with senior members of NR&D on several occasions from February through May 2014 to explain the findings and the steps NR&D must take going forward.
Out of the total, K17 992 084.68 relates to claimed expenditures for which funds have not been accounted for and K37 208 000.43 is in respect of questioned costs resulting from the April 2013 financial review.
In addition, USaid is claiming K 6 686 304 in unaccounted for funds from insurance reimbursements for a stolen project vehicle.
According to USaid project support rules, awarded funds are provided in monthly cash advances for use in their programmes and within 45 days after receipt of the funds, the partners are required to report back to Usaid on how the funds were used.
Accordingly, USaid requires repayment of any amount not reported to the US agency for a period of more than 90 days.
“K17 992 084.68 thus relates to the amount not reported by NR&D for a period over 90 days,” explained Arbuckle in the interview.
–areas of potential fraud–
The K37 208 000.43 ($117 851.04) was discovered in questioned costs (both unsupported and ineligible costs) and also areas of potential fraud, according to the agency.
The eight NR&D employees admitted the following to the USaid Office of Inspector General:
—NR&D employees received lodging (accommodation) payments despite NR&D paying the hotels directly.
—NR&D staff members received travel allowances for training and project activities held within their duty stations
—NR&D staff members did not account for unused travel advances while claiming the full amount as project expenses.
—Fuel charges without proper supporting documentation and exorbitant fuel utilisation to recorded distance travelled. Fuel allowances were provided to NR&D employees for personal non-project activities.
—Unsupported training expenses
—Unaccounted for insurance funds received by Nkhoma Synod after the theft of a USaid funded project vehicle.
—Funds were used to repair a non-USaid funded project vehicle.
In a separate interview, the Reverend Kachipapa, admitted that the collapse of the project and loss of funds “was a big blow to the church and the country.”
“The issue of water and sanitation is a serious matter and for us to lose such funding it is a shame to the church. We have lost trust from our church members and we understand them. Christians would not smile at this just because they are God fearing,” he admitted.
Recently, 21 reverends in the synod wrote their leadership, demanding answers and action against those involved in the fraud.
Kachipapa admitted that the suspected employees were walking free, but he said “we have undertaken administrative actions against them.”
“We have suspended all of them and demanded individual reports from them. Currently we suspect six were involved, but the number is likely to increase because some of them are now mentioning the reverend who headed the project,” said Kachipapa.
The church already fired the NR&D head from the project, but he is yet to be questioned on the fraud.