Tackling fraud and improving health spending in Malawi

A recent study conducted by Options and its partners, at the request of the Malawian Ministry of Health, found discrepancies in the efficient use of health resources at local government and health service delivery levels across the country.

The report, published in February 2015, exposed loopholes revealing how district councils manipulate the Integrated Financial Management Systems (Ifmis) to divert funds meant for healthcare delivery.

The research team heard several examples where the District Health Management Team diverts money budgeted for other purposes in their annual budget to pay for fuel and staff allowances. Over-expenditure of government budget lines is a legal offense in Malawi, where Parliament must approve both annual budgets and budget revisions. As the report says;

“When it is later discovered that the fuel budget is exhausted and the balance will not accommodate the entire payment, the whole or part of the payment is coded to another budget line where the budget is not yet exhausted.”

This way, the district and central hospitals spend up to 99.9 percent of their annual budget and balance their books even though the money is spread to several expenditure lines without the approval of parliament.

Essential medicines have also been found to ‘leak’ from health facilities, with malaria testing kits, malaria drugs and common antibiotics especially vulnerable to theft.

Cindy Carlson, Options’ Team Leader in Malawi, and co-author of the report says;

“There is now huge momentum within the Ministry of Health to tackle theft and fraud, particularly around drugs. We have been requested to support an initial pilot investigation team as they move this forward, since we helped to initiate the whole process.”

We have been working closely with the government since “Cashgate”, the public finance corruption scandal of 2013. Our project forms part of the UK investment to improve financial management, governance and accountability in Malawi’s health sector.

At national level, we work with the Ministry of Health and the National Local Government Finance Committee to plan and implement more robust systems to prevent the misuse of funds. We help government partners track how funding is used more generally in order to ensure that the now limited government resources available to the health sector are having a direct positive impact on improving health outcomes.

At local level we are assessing the roles and functions of Health Centre Advisory Committees. This will feed into the design of a training and mentoring programme at sub-district level, to strengthen accountability with a particular focus on oversight of drugs and medical supplies.