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Should we Blame Software for Fraud Committed Outside of the System?

 

October 14, 2014

Doug Hadden, VP Products

The Malawi government “Cashgate” scandal has brought some focus on the “Integrated Financial Management Information System” (IFMIS) used. My sense was, until today, that fraud occurred outside of the system. That payments could occur outside of the system like purchases or payments. The IFMIS in NOT FreeBalance.

It now appears that transactions could be deleted with no audit trail.

I’m gobsmacked that a commercial ERP vendor allows this poor practice. Perhaps there is something in code customization that gets around built-in features. But, the ERP manufacturer, Epicor, remains silent in this long-running scandal.

The result of this is fraud of “K92 billion of state funds” and stopping donor aid that represents 40% of the budget for the government. And, this corruption is only for a 6 month period, so there is the suspicion that far more was misappropriated.

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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