RBM’s Export Development Fund’ Board defends credibility of Fletcher & Evance as forensic audit experts

* There are concerted efforts by certain individuals to use the media and abuse state institutions to fault the process

* To discredit the forensic report, and distract unsuspecting members of the public from the real issues at EDF

* Fletcher & Evance were selected competitively in full compliance with the Public Procurement and Disposal of Assets Act

By Duncan Mlanjira

Directors of the Board for Export Development Fund (EDF) has issued a public statement, strongly defending their selection of Fletcher & Evance to carry out a forensic audit over some significant discrepancies regarding the management of specific financial transactions that were red-flagged by an external financial auditor for the year 2020.


This follows reports that was fed in the media that the Board of EDF — a subsidiary of the Reserve Bank of Malawi (RBM) — hired a non-auditing and not-registered firm to conduct auditing at the institution, saying this was deliberately done to cover up some financial misappropriations.

The Board highlights the misrepresentation of facts that include handpicking Fletcher & Evance without following bidding process and that it hired a non-auditing firm which is not certified and licensed as Certified Public Accountants by the Regulator, Malawi Accountants Board (MAB).

The Board also disputes that F&E was instructed to conduct the forensic audit on selected transactions, instead of all the transactions undertaken by the EDF during the review period 2017 to 2020 and that the firm was suspiciously paid the sum of K25 million despite alleged irregularities.

The media reports also indicate that some members of EDF have illegally been receiving unspecified fringe benefits and without deducting income tax and that without regard to abuse of office and conflict of interest, one of the directors was awarded a commercial contract to sell agricultural commodities on behalf of EDF.

The Board also expressed its dismay that based on these allegations, the directors of the Board should be probed by the Anti-Corruption Bireau (ACB) for corrupt practices.

EDF Board chairperson Neil Nyirongo

In the statement signed by its chairperson, Neil Nyirongo, the Board clarifies that following a financial audit for the year 2020, “the external auditor flagged significant discrepancies regarding the management of specific financial transactions”.

“This led to the Board of Directors requiring management to explain the matters raised by the financial auditor and management could not provide satisfactory responses to assure the financial management integrity of EDF.

“Considering the failure by management to provide sufficient response, the ensuing doubts generated by the gaps in information — and the need to fulfill its fiduciary duty — the Board of Directors resolved to engage a forensic auditor to conduct investigations and gather more information around the transactions singled out by the financial audit.”


Thus, the Board said, the need for the commissioning of the forensic audit “in response to specific transactions which were flagged in the Fund’s external audit report for the year 2020” and that “the scope of the forensic exercise reflected the areas of concern as highlighted by the external auditors”.

The Board further adds credence to what Fletcher & Evance earlier indicated in a press release that the firm was selected competitively in full compliance with the Public Procurement and Disposal of Assets Act.

“Due to the nature of the items that were the subject of the investigation, the Board presided over the hiring of the investigator to preserve the integrity of the exercise. The Board hired Fletcher & Evance as the firm adequately demonstrated capability in conducting the forensic review for EDF.”


The Board also says it took cognizance that Fletcher & Evance has also conducted similar forensic exercises in other financial service institutions in Malawi and as part of the hiring process, it also verified that the firm possesses the Association of Certified Fraud Examiners (ACFE) designation.

“The ACFE is the global governing body of certified fraud examiners, and its fraud examiner certification is an internationally recognized professional investigation certification which is distinct from certifications required by those practicing in the accounting space.”

In its conclusion, the EDF Board emphasizes that it is “aware that there are concerted efforts by certain individuals to use the media and abuse state institutions to fault the process, discredit the forensic report, and distract unsuspecting members of the public from the real issues at EDF”.


“The Board will not be intimidated or succumb to any forms of pressure and will ensure that those found at fault are answerable for their roles in the suspicious transactions at the company.”

When the first article on Fletcher & Evance appeared that described it as “bogus”, the firm put the record straight that over the years it has developed the capacity, skills and procured tools to handle any type of forensic audit in Malawi and anywhere.

The firm said, which the EDF Board has also emphasized, that it was requested to submit a proposal through restricted tendering to conduct a special audit on EDF’s Commodity Market Marketing (CMM) unit.

“Restricted tendering is the recommended approach in forensic audit as it does not alert fraudsters who can destroy the integrity of the evidence and conceal illicit matters,” the press release on Wednesday said.

“Fletcher & Evance emerged as the preferred bidder out of the three (3) short-listed firms, and Fletcher & Evance conducted the forensic audit and submitted its report with recommendations to the board of EDF.”

The firm further says it is a limited company and the only specialized forensic accounting firm in Malawi, saying over the years it has “developed the capacity, skills and procured tools to handle any type of forensic audit in Malawi and anywhere”.

“We use the most sophisticated analytics, including machine learning and complex algorithms, to detect and investigate fraud and all forms of malpractices.

“Forensic Audit is a rare specialization in the field of accounting, and only those who specialize in specifical areas of accounting, investigative techniques, law of evidence, and ability to recognize criminal activities are the ones who can do these audits.

“Forensic audit is not the same as financial audit which is regulated by the Public Accountants and Auditors Act No.5 of 2013, through the Malawi Accountants Board (MAB) and the Institute of Chartered Accountants in Malawi (ICAM).

“Neither an auditor nor a certified accountant can automatically become a forensic auditor.”

The firm further says that with its forensic auditors, “apart from being members of MAB and ICAM, are affiliated with worldwide specialized forensic audit institutions like the Association of Certified Fraud Examiners (ACFE) – USA and ACFE Malawi Chapter”.

It is also affiliated with the Institute of Certified Forensic Accountant (ICFA) – Canada, and the International Institute of Certified Forensic Investigation Professionals (IICFIP) — USA/Kenya among others.

It said the media report “does not refute nor deny its findings in the EDF report, nor does it provide any evidence to the contrary. In the absence of this, the article entirely agrees with our findings and recommendations.


The media article said the forensic audit report made serious accusations against EDF management of not following laid down procedures in processing lending transactions.

It has further faulted the EDF Directors for approving such transactions and showing gaps in corporate governance as well as oversight role during the review period.

The report has also condemned RBM Internal Auditors for failing to identify and report serious issues to the Board of EDF during the audit of EDF’s transactions.

Fletcher & Evance say the formation of the Institute of Forensic Auditors in Malawi (IFAM) is currently underway, which will regulate forensic accounting in Malawi through the Institute of Forensic Accountants in Malawi Bill that is currently being drafted.

“We would like to assure the public that Fletcher & Evance will continue conducting forensic audits in its efforts to assist in the fight against fraud and corruption with objectivity, professionalism and will not compromise on its standards nor carry any prisoners.”