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52-605: The scandal first came to light in September 2013, when an accounts assistant in the Ministry of Environment was found with several thousand dollars (USD) in his car. A week later, the Budget Director in the Ministry of Finance was shot outside his home, and several other civil servants were found hiding large sums of money, thus unravelling what came to be known as the "Cashgate" scandal. Following Cashgate's revelation,

104-646: A 13% increase in constant currency terms on the last financial year. In North America revenues topped $ 2bn and in Asia Pacific $ 1bn for the first time. In 2023 Baker Tilly's UK member firm MHA announced several mergers with smaller firms in Wales, the North West of England and Scotland. In February 2024 Baker Tilly International announced revenues of $ 5.17bn with growth across all regions and service lines. Baker Tilly US, LLP (doing business as Baker Tilly)

156-501: A centralised and efficient management of government funds (generally income and expenditure) across departments and enable the money a government receives or spends to be reconciled with the actual funds in the government's bank accounts, countrywide. Due to the vast sums that pass through government bank accounts, it is important that PFM systems be robust and effective at managing government funds (be they raised from taxes, donors, dividends, etc.), detecting and resolving problems. In 1995

208-413: A company belonging to one Osward Lutepo, a senior official in the ruling People's Party and Deputy Director of Recruitment and Sensitisation, who eventually became the prime Cashgate suspect. The high-profile arrests continued through October and November, with two other suspects arrested over payments received despite no services provided. By November, more than 50 people had been arrested in connection with

260-697: A contract with Soft-Tech Consultants was signed in July 2005. In November 2005, the new IFMIS was formally introduced and customised to Malawi's own specific requirements across 50 ministries and government entities. According to the UK-sponsored audit – led by accounting firm Baker Tilly – the IFMIS operated as follows: "IFMIS generates payments to suppliers entered onto the system. In turn, cheques are raised for payment to suppliers and others which are then printed on Reserve Bank of Malawi (RBM) cheques. This function

312-578: A merger with the M&;A, ESG and Real estate advisory services firm AddVANTE. The newly combined entity will rank among the top 12 business advisory firms in Spain, with a team of more than 375 professionals across 10 offices. On 16 March 2022, Baker Tilly International announced that it was separating member firms in Russia and Belarus from its global network saying that "this decision is a direct consequence of

364-462: A new cabinet was appointed, and notably the former Finance Minister Ken Lipenga , and the former Justice Minister Ralph Kasambara were not included, suggesting that they had been implicated in Cashgate. Additionally, approximately 50 bank accounts, including those of government officials, were frozen. People began to speculate whether the two were implicated in the saga because no formal explanation

416-586: A partnership with the University of North Carolina . The objective of the collaboration is to "identify innovative, culturally acceptable, and affordable methods to improve the health of the people of Malawi, through research, capacity building, and care". The hospital also receives support from Baylor Pediatric AIDS Initiative (BIPAI). Additional support came from the German Hospital Partnership MAGNET , administered through

468-652: A total of MK 13,671,396,751 (Malawian Kwacha) was misappropriated during the six-month period of 2013: More than MK 6 billion (45%) in Cashgate transactions; nearly MK 4 billion (29%) in payments with no supporting documents; and MK 3.6 billion (26%) in inflated procurement prices. The report concludes: "Overall, we have identified funding misappropriation and theft of GoM [Government of Malawi] funds. We have seen funds transferred between unrelated companies, individuals withdrawing funds from unconnected organizations and inflated prices paid to companies with limited or no trading history and very large cash withdrawals. We do not believe

520-636: Is a public accounting and consulting firm headquartered in Chicago, Illinois. Formerly known as Virchow, Krause & Company, LLP, the firm is the American member of Baker Tilly International. Having joined Baker Tilly International in 1999, the firm officially adopted the Baker Tilly name on June 1, 2009. Vault Accounting 50 has ranked Baker Tilly Virchow Krause, LLP as the 8th most prestigious accounting firm in their 2019 ranking. The US branch of

572-459: Is a consulting and public accounting firm. It is currently the 10th largest accounting network in the world by revenue with 43,000 people in 700 offices across 141 territories with combined global revenues of US$ 5.2 billion. Baker Tilly operates geographically through four regions: Asia Pacific; Europe, Middle East and Africa; Latin America; and North America. Each region has a chair, appointed by

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624-632: Is appointed the new CEO. The network's global office moves from New York to London. In 2003 the network breaks into the top 10 of the International Accounting Bulletin World Survey (where it remains today), with combined revenues of $ 1.4bn. In 2008 Virchow Krause, LLP, the network's largest US member firm, announced it would rebrand as Baker Tilly, LLP , taking the Baker Tilly brand into the US market place. Baker Tilly International announced in September 2014 that

676-551: Is currently centralized at the Accountant General’s Department. All the payment vouchers, less the supporting documents from the various Ministries, are manually brought to the Accountant General’s Department for verification before cheques are processed. The IFMIS system is designed to enable the GoM to monitor its budget and cash position." However, reviews of Malawi's IFMIS revealed significant control weaknesses within

728-722: The Lingazi Namilomba Forest Reserve and the Lilongwe Wildlife Centre ; adjacent to Kamuzu College of Nursing . The geographical coordinates of the hospital are:13°58'37.0"S, 33°47'11.0"E (Latitude:-13.976944; Longitude:33.786389). Kamuzu Central Hospital is a large referral hospital that serves as the referral hospital for the Central Region of Malawi. It is the referral hospital for about 5 million people. As of May 2020, it had about 60 doctors and about 300 nurses. As of 2019,

780-443: The government of Denmark . Political problems cropped up before the hospital was complete. Only the first phase was finished. The departments that were left out included (a) Obstetrics & Gynecology including Antenatal care (b) Orthopedics (c) Psychiatry and (d) Tuberculosis unit. From 1977 until 2004, the hospital was known as Lilongwe Central Hospital . In 2004, it rebranded to its current name. Kamuzu Central Hospital has

832-513: The Accountant General’s Department and transfer funds into supplier accounts without authorisation." A subsequent audit revealed that, within IFMIS, "a significant number of transactions had been deleted." In September 2013, Victor Sithole, a young accounts assistant in Malawi's Environment Ministry was found with roughly $ 300,000 (USD) in the trunk of his car. A week later, on 13 September, Paul Mphwiyo, Budget Director in Malawi's Ministry of Finance,

884-780: The British government provided the Auditor General of the Government of Malawi and the Malawi Law Enforcement Agencies with a second report that summarized 53 Cashgate case files. The total financial loss from Cashgate was found to be slightly higher than previously estimated (up to MK 15.5 billion). This report also detailed civil servants, companies, banks, Ministries and other individuals and organizations involved in illicit Cashgate transactions. The second report demonstrated that Osward Lutepo – who

936-503: The British government sponsored an independent audit into the scandal, focusing on transactions made through Malawi's electronic financial management system. The first audit – released to the public in February 2014 – demonstrated that 16 Malawian companies received illicit payments from the government between April and September 2013 for goods and services that were not performed. All told, the audit found that an estimated $ 32 million (USD)

988-792: The CODA Group, to be implemented by a South Africa-based reseller called UES. In 2004, Professor Lise Rakner, a Political scientist and senior researcher at the Chr. Michelsen Institute (CMI) in Norway, the largest centre for development research in Scandinavia published a report in collaboration with researchers from the UK's Department for International Development (DFID) and the Institute of Policy Research and Analysis, titled The budget as theatre –

1040-515: The California based accounting firm Squar Milner and acquired the New York–based firm Margolin, Winer & Evens effective November 1, 2020. It was also announced on November 3, 2021, that Baker Tilly, US, LLP is acquiring The MFA Companies, a Boston based financial services and consulting firm. Kamuzu Central Hospital Kamuzu Central Hospital is a tertiary referral hospital in

1092-474: The International Board, who leads an advisory council elected by members in that region. In 1987 Summit International Associates, Inc. is incorporated. The network is represented in 20 countries by 50 firms, with combined revenues of US$ 200m. It ranked 22nd in the world in that moment. 2000 Stephen Flesch stepped down as CEO and President of the network after 13 years in the role. Geoff Barnes,

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1144-499: The Minister of Good Governance, Christopher Daza, to oversee this plan and communicate its findings to Malawi's donors. However, many foreign donors began suspending aid in response to the scandal. On 11 October 2013, Norway froze all budget support to Malawi. In November 2013, Britain followed Norway to delay budget support. The American government said it did not plan to suspend aid since the aid it gives goes to NGOs, not directly to

1196-427: The UK firm MHA Macintyre Hudson (now just known as MHA) had joined its network replacing the former UK Baker Tilly firm who had joined RSM International earlier that year. After leading the network for 16 years, Geoff Barnes retired from the role of CEO in 2016. Baker Tilly International's Board of Directors unanimously voted EMEA regional chairman, Ted Verkade, as chief executive officer from 1 July that year In 2019

1248-879: The acquisition of Seattle-based accounting firm Bader Martin, in August local government consulting firm Management Partners and in September tax consultancy firm True Partners Consulting. In December 2021 top 50 UK law firm Freeths became the first stand-alone legal practice in Europe to join Baker Tilly International continuing the global network's expansion into commercial law. As a full-service law firm, Freeths' 12 UK offices and team of 600+ lawyers provides advice to businesses in areas such as mergers and acquisitions, business immigration, environmental law, dispute management, insolvency and competition policy. In September 2022 Baker Tilly Spain announced details of

1300-458: The actions of these governments, and not the individuals of these countries." On 1 June 2022, Baker Tilly International announced the appointment of Francesca Lagerberg as their new CEO. She is the first British woman to be the global CEO of a top 10 accounting firm or network. She regular appears in the media talking about accounting sector and industry issues. In February 2023 Baker Tilly International announced revenues of $ 4.66bn reflecting

1352-449: The city of Lilongwe , (capital of Malawi ). It is estimated to have 780 beds, although the true number of patients always exceeds the number of beds. It serves approximately 5 million people, referred from five district hospitals and from other parts of Malawi and parts of neighboring Tanzania , Zambia , Mozambique and Zimbabwe . The hospital is located in an area of the city of Lilongwe called Area 33 (also Nangwagwa ), south of

1404-545: The education sector. Staff not paid and not motivated. Incomplete and doctored records: auditing not done." That same year, a peer-reviewed article in November 2004 identified 21 issues that needed to be resolved for the IFMIS to work properly. For some reason, those issues could not be resolved. In May 2005, the Government decided to adopt and implement an EPICOR-based IFMIS following the study tour to Tanzania in March 2005, and

1456-573: The firm originated in 1931 and the present partnership was organized in 1953. On June 1, 2009, the former Virchow, Krause & Company, LLP changed its name to Baker Tilly Virchow Krause, LLP, becoming the only U.S. member of the Baker Tilly International network to be branded as "Baker Tilly". Baker Tilly Virchow Krause, LLP merged with Philadelphia-based ParenteBeard, LLC effective October 1, 2014. On September 20, 2021, Baker Tilly, US, LLP acquired Charleston, WV based accounting and consulting firm Arnett Carbis Toothman. Baker Tilly US, LLP merged with

1508-462: The formal and informal institutional makings of the budget process in Malawi . The report found that "the proposed electronic system, IFMIS, is not being implemented, resented for removing discretionary power to reallocate resources." The report also found that, in addition to rampant fraud and corruption in procurements and disbursements, there were "no adequate records of staff and pensions and advances, leading to problems of ghost workers, especially in

1560-540: The government of Malawi began implementing a PFM known as an Integrated Financial Management Information System (IFMIS) backed by the World Bank. This system was intended to replace the manual systems that were previously in place. If properly implemented and managed, the IFMIS system automatically links planned budget and actual cash budget demands, allowing managers to efficiently schedule expenditures to minimize cashflow problems and improve public service delivery. Thus,

1612-497: The government, and the IMF delayed a loan worth $ 20 million. The aid suspended by the EU, Britain and Norway collectively amounted to around $ 150 million. By December civil society groups were protesting against the government's handling of the scandal, saying the government was not doing enough to get to the bottom of the matter, and to finalise the investigation. There were numerous calls for

Capital Hill Cashgate Scandal - Misplaced Pages Continue

1664-444: The head of Malawi's Anti-Corruption Bureau, a failure to enact financial reforms and suspicious wealth accumulation of high-ranking DPP members. However, no link between either the former or current President Mutharika and Cashgate has been established. Most governments of countries have Public Financial Management (PFM) systems that they use to manage the flow of funds across various levels of government. These accounting systems enable

1716-513: The hospital admitted as many as 25,000 children annually. That is an average of about 70 children daily. In April 2012, the late Bingu wa Mutharika (24 February 1934 – 5 April 2012), the third President of Malawi was admitted to Kamuzu Central Hospital and was diagnosed with cardiac arrest . The hospital was built in 1977 by the Danish International Development Agency (DANIDA), with money provided by

1768-466: The largest regional accounting and business advisory firms in the Northeast increasing Baker Tilly's New York team to nearly 400 professionals and West Virginia-based accounting and consulting firm Arnett Carbis Toothman, LLP. The firm also announced that it would enter Boston with the acquisition of The MFA Companies and acquire California-based The Compliance Group. In May 2022 Baker Tilly US announced

1820-457: The looting was made possible because of loopholes in the IFMIS, and also suggested that Mphwiyo may have been shot by the scandal's perpetrators because he was on the verge of busting a corruption syndicate. President Banda – then still a member of the DPP – announced a plan to address the loopholes in the IFMIS and investigate the plunder of public resources. She enlisted a Cabinet Commission chaired by

1872-399: The main reasons for the IFMIS were efficient expenditure control, to provide timely budgeting and accurate financial information across government, to provide a state-of-the-art computerised accounting system and to provide a standardised integrated financial management reporting system across government. A pilot project was launched in five ministries, but was met by many problems, resulting in

1924-477: The network unveiled a new logo, visual identity and a new slogan: 'Now, for tomorrow'. With this change, more than 90% of firms trade as Baker Tilly, strengthening the network's global presence. In August 2020, Baker Tilly US, LLP and Squar Milner, LLP, announced to merge effective on 1 November 2020. The joint venture name is Baker Tilly US. In November 2021 Baker Tilly US announced multiple acquisitions including New York–based Margolin, Winer & Evens LLP, one of

1976-459: The period of September to April 2013. It issued two reports of the audit: the first, made public in February 2014, traced approximately $ 32 million (USD) of stolen funds to 16 Malawian companies, though it did not provide specific transactions or names; the second, delivered confidentially to the Government of Malawi, detailed names of companies and individuals involved in dozens of illegal transactions. The February 2014 Baker Tilly report found that

2028-444: The president to resign, however President Banda rejected these calls, saying the scandal was a "golden opportunity" for her government to clean up the civil service in Malawi. With support from the British government, she then initiated a forensic audit into Cashgate and began to take action against the scandal. The same week in which Malawi's donors suspended their foreign aid, President Joyce Banda sacked her cabinet. On 15 October,

2080-558: The primary beneficiary of the scandal to be Osward Lutepo, who has since been sentenced to 11 years in prison. In November, 2014, after signs that Cashgate-related corruption extended beyond the term of the British government's audit, the German government initiated another audit to review potential theft dating back to 2009, under then-President Bingu wa Mutharika . The results of this audit have not yet been revealed. Several donor countries have since suspended foreign aid funding to Malawi as

2132-471: The receivers of these funds are therefore the ultimate beneficiary in all cases. However, in our opinion further specific detailed work is needed to support the Malawi Law Enforcement Agencies in investigating these matters across international jurisdictions. In this regard we encourage the international donors to continue to support oversight and thus to support ongoing investigations in order to ensure convictions and, if possible, reparations." Later in 2014,

Capital Hill Cashgate Scandal - Misplaced Pages Continue

2184-402: The scandal is deliberated. Cashgate remains a high-profile political dispute in Malawi. Current President Lazarus Chakwera and his Tonse Alliance (Malawi) continue to allege Banda's guilt in the scandal, though there is no evidence supporting this claim. Likewise, Banda and her People's Party (PP) have long speculated both Mutharikas’ involvement in Cashgate, citing the mysterious murder of

2236-419: The scandal, and on 8 November, the former Justice Minister Ralph Kasambara was arrested for allegedly masterminding the shooting of Paul Mphwiyo. Kasambara would be rearrested on 27 January 2014, for money laundering charges, which he has denied. British accounting firm Baker Tilly was enlisted by the UK's Department of International Development (DFID) to conduct a forensic audit of possible corruption during

2288-454: The state. Some claimed Paul Mphwiyo was clean, and acting to close the loopholes, others claimed that he was implicated in the corruption. Before long, a web of plots of how civil servants were siphoning funds from government coffers were rife on social media, blogs and online news sources. Upon the emergence of a large-scale corruption scandal, Malawi became enmeshed in chaos and speculation. President Joyce Banda's administration maintained that

2340-504: The system. It is believed that the cash gate scandal caused financial loss to the government. Soft-Tech found that "perpetrators were able to transfer funds from the government bank accounts to the vendor accounts for goods and services that were never supplied and then to delete these transactions from the IFMIS system." The government and Soft-Tech believed that "the system was manipulated to release funds without lawful authority, create and approve unauthorized payments, issue cheques through

2392-438: The system. The GoM suspected that "a number of perpetrators had exploited these weaknesses through collusion, resulting in financial loss to the government exchequer." The government of Malawi soon recognized that the IFMIS was vulnerable to misuse and corruption and commissioned Soft-Tech Consulting Limited – the software solutions technology company that initially implemented the IFMIS – to investigate any illegal exploitation of

2444-472: The termination of the contract with the first supplier. Among the problems encountered during the pilot trial were severe mismanagement, technical problems, funding shortages, disagreements among members of the project (there were three distinct suppliers), insufficient training and staffing cultural challenges, resulting in long delays. By 2003, the World Bank was financing an IFMIS in Malawi sourced from

2496-467: Was given as to why they were dropped. Malawi's Anti-Corruption Bureau (ACB) also began an investigation into illicit financial activity among civil servants, and started making arrests in connection with Cashgate. Included in the ACB's initial arrests were Alice Namata, a principal administrative officer in the Ministry of Wildlife and Tourism, Robert Nantchito, an accounts assistant in the Ministry of Lands who

2548-472: Was linked to several businesses implicated in Cashgate – was the primary beneficiary of the scandal, along with a number of other businessmen. Former commander of the Malawi Defence Forces, General Henry Odillo, was also mentioned. Neither President Peter Mutharika nor former President Joyce Banda were cited in this report as linked to Cashgate. Baker Tilly Baker Tilly International

2600-517: Was shot by armed men who were waiting for him just outside the gate of his house in Lilongwe Area 43. Mphwiyo's wife rushed him to a nearby health clinic, where doctors managed to stabilise his condition. He was transferred to Kamuzu Central Hospital and the next day flown to South Africa for specialist treatment. In the ensuing days, stories began to emerge that millions of dollars had been embezzled by government officials colluding to defraud

2652-587: Was stolen during the six-month period under review. In October, 2013, more than 70 people were arrested in connection to Cashgate – many of whom were subsequently tried and convicted. President Joyce Banda also fired her entire cabinet. In October 2014, Baker Tilly provided the Government of Malawi with a confidential report summarizing individual case files from its original audit. The report – intended to be private and "provided to assist Malawian law enforcement agencies only" – outlines individuals and companies involved in illicit Cashgate-related transactions. It found

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2704-538: Was working with the Ministry of Trade, and Maxwell Namata. Soon after, one Pika Manondo, a suspect believed to be behind Mphwiyo's shooting was put on an Interpol list. Later in October, the ACB continued to make arrests. Chazika Munthali, the principal accountant in the Office of President and Cabinet, was charged with approving three vouchers totaling MK 1 billion (~US$ 2.3 million) to International Procurement Services,

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