Monday, September 21, 2020

Bank of Botswana Management in fraud allegations

Confidential notes between the former Bank of Botswana Chief Internal Auditor (Joe Mutwale) and the Bank’s Audit Committee Chairman (Gordon Cunliffe) paints a picture of how the management of the Central Bank deliberately falsified figures that formed part of answers presented to parliament by the Minister of Finance and Development Planning.

A Member of Parliament had asked a set of pointed questions on the lifestyle of Ms Linah Mohohlo who is the Governor of the Bank of Botswana.
In his correspondence, which Sunday Standard is in possession of, the former Chief Internal Auditor says, by falsifying the figures, Management of the Central Bank had effectively committed fraud for which they should be held accountable.
More importantly, he warns that the integrity of the Bank of Botswana is on line should the public get to know about the actions of the Bank’s Management.

Outlining how false figures eventually reached parliament, Mutwale said, “On March 15th, 2007, the Governor asked me to put together the numbers for parts (b) and (c) and to coordinate the answers to the questions (b) and (d). I coordinated the answer to Question (9) with the Accounting and Planning Department and we produced the analysis… I handed over the schedule to the Governor on the same day. Later during the night, the Governor phoned me up and asked whether the per diem figure of P343 212.02 was really part of the cost of the trips and suggested that it be left out. I said that as far as the question stood, cost included all the components of the trips.”
Mutwale says he viewed the statement by Ms Mohohlo as an attempt by the Governor to influence the figures to be reported to parliament.

He further says he was surprised to later see that there were disparities between the figures reported in the press and the Bank records.

“Management had reported to Parliament figures that did not agree with the underlying records of the Bank. I considered this as a deliberate misrepresentation by Management, which I judged to be serious enough to be reported to the Chairman of the Audit Committee for appropriate action in order to protect the integrity of the Bank.”

Mutwale adds that, upon seeing the falsified figures, he did not go back to the Governor to find out why figures had been tempered with “as she never sought Internal Audit’s views when the figures were changed. In the circumstances, both in line with my ethical duties as a professional accountant and auditor, and my duties as enshrined in both the Audit Committee Charter and the Internal Audit Charter, I was duty bound to report the disparities to the Chairman of the Audit Committee, in case any subsequent enquiries reveal that incorrect figures were provided by the Bank in response to the Parliamentary questions.”

All these happened after Member of Parliament for Kweneng East, Gordon Mokgwathi, asked a string of questions that effectively probed the lifestyle of Central Bank Governor Linah Mohohlo.
Among other things, Honourable Mokgwathi had asked the Minister of Finance to tell the House the cost at which the Bank of Botswana Governor’s house was built and furnished. The MP further wanted to know the number of foreign trips undertaken by the Governor in the past year as well as the cost of such trips.
Also posed as a question was whether or not the Minister would consider amending Bank of Botswana Act to ensure that in the spirit of corporate governance, the Governor, as the Chief Executive Officer, does not also serve as Chairman of the Bank’s Board.

“Chairman, I am concerned that the core issue does not appear to have been addressed: I have alleged that the Governor attempted to get me to falsify figures, and Management indeed falsified the figures reported to the Press (and as confirmed by Management’s write-up to Board members). If Management were indeed convinced that the Bank’s internally audited books as presented to them were incorrect, they should have initiated corrective action to amend the figures using the normal processing and authorization procedures. To then explain that some of the changes were made by the Minister is unacceptable because nobody is allowed to misrepresent the books of the Bank, and this would imply that Management was also party to the misrepresentation because they knew that the figures were incorrect.”

Mutwale ends his letter by reminding the Audit Committee Chairman that the Management of the Central Bank has committed a very serious offence for which they should be held accountable.
“Chairman, the importance of this issue cannot be over-emphasised; Management, by deliberately falsifying figures, has committed fraud and could bring the integrity of the Bank into question if the public were to know it. Management then attempts to divert attention from the main issue and threatens the Chief Internal Auditor with disciplinary action and possible dismissal and blacklisting in the job market,” said Mutwale.

In a damning letter, Mutwale says, “One tends to note Management’s resolve to give away as little information as possible, while we urge the commercial banks supervised by the Bank to be as transparent as possible.”
By the time of going to press, attempts by Sunday Standard to get official response from Bank of Botswana had not been successful.

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