Mozambique: State Institute denies misuse of €24.2M funds earmarked for Covid fight

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Mozambique: State Institute denies misuse of €24.2M funds earmarked for Covid fight

8:05 CAT | 06 Feb 2024

FILE - "There was no misappropriation of funds and it is clarified that the amount of 1.7 billion meticais was earmarked for the payment of subsidies to households, and its realisation was carried out through the delegations of the National Institute for Social Action (INAS), in compliance with the government's plan. (...) Furthermore, the central body does not make payments to beneficiaries; this activity is the responsibility of the delegations, which are independent budgetary units,"reads the INAS note. [File photo: DW]

Mozambique’s National Institute for social Action ( INAS ) on Tuesday denied that it had misappropriated funds for combating Covid-19, as pointed out by the Administrative Tribunal, explaining that the funds were distributed among its regional delegations, as provided for in its internal regulations.

“There was no misappropriation of funds and it is clarified that the amount of 1.7 billion meticais was earmarked for the payment of subsidies to households, and its realisation was carried out through the delegations of the National Institute for Social Action (INAS), in compliance with the government’s plan,” reads the document.

“(…) Furthermore, the central body does not make payments to beneficiaries; this activity is the responsibility of the delegations, which are independent budgetary units,” the body said in a reaction note sent to the daily newspaper O País.

At issue is an audit by Mozambique’s Administrative Tribunal that detected a deviation of an amount equivalent to more than €24 million in funds disbursed in 2021 by the state for the prevention and mitigation of the Covid-19 pandemic.

In the audit report, to which Lusa had access in December, the Administrative Tribunal states that it identified “matters that distort the financial statements of the funds disbursed for the prevention and mitigation” of Covid-19 in the 2021 financial year.

The document, sent to the government, states that the National Institute for Social Action, a beneficiary public institution under the auspices of the ministry for gender, children and social action, incurred expenses totalling around 1.71 billion meticais ( €24.2 million), an amount “of which there was no evidence that the contracted services were paid for, which constitutes misappropriation of funds”.

“Auditing the financial execution of Covid-19 funds requires a prior understanding of the sector’s intervention plan, the scope, the context in which the country was living when the respective expenditure was made and an understanding of the internal control system established. The examination of the financial statements must take these elements into account to allow the opinion to faithfully correspond to the truth of the facts,” reads the INAS note.

INAS’s first reaction comes after the minister for gender, children and social action, Nyeleti Mondlane, denied on Saturday that more than €24 million had been embezzled.

READ: Mozambique: Minister refutes €24M in Covid funding gone missing

“It was a new experience for the sector and the sector has its rules. The Covid-19 emergency demanded that we act quickly. So, in some cases, our staff went to the field and registered the families in vulnerable situations and made the payments (…) we have already responded to those who are responsible, which is the ministry of the economy and finance,” added Nyeleti Mondlane.

The audit by Mozambique’s Administrative Tribunal also states that undue payments totalling more than 78.6 million meticais ( €1.1 million) and ineligible expenses totalling 25 million meticais ( €354,000) were made.

Among other things, the Administrative Tribunal also draws attention to contracts not submitted for prior inspection worth more than 57.3 million meticais (€811,000), irregularities in the contracting process totalling more than 100.1 million meticais ( €1.4 million) and the lack of supporting documents for expenditure totalling 11.7 million meticais ( €165,700).

The document recalls that in view of the effects of Covid-19 on the economy, the Mozambican government drew up a “needs plan” budgeted at US$700 million (€633.5 million), of which US$100 million (€90.5 million) for prevention and treatment, US$200 million (€181 million) to support the state budget, US$240 million (€219 million) for transfers to families and US$160 million (€145 million) for micro-business.

The audit concludes that the “deficiencies” found in the process of control and management of these funds “contributed to the financial statements having material distortions”, namely the “deficient communication in relation to the purpose of the disbursements made” by the ministry of the economy and finance, the “deficient implementation or non-existence of mechanisms” of control, the “deficiency in the organisation of archives and records of accountability processes”.

READ: Mozambique: Payment of Covid-19 subsidy marked by disorder in Maputo

Source: Lusa