07 May 2026

The rot is now exposed. 

An estimated P33 billion could have been lost to corruption, wastage and mismanagement within government itself.

That money could have built schools for children still riding donkey carts to class. 

It could have built clinics for patients walking long distances for care, staffed hospitals, stocked pharmacies, or connected every village still in the dark to the power grid.

But the money leaked quietly through government walls, not through one bad tender, but through repeated variations, procurement abuse, disregard for policy and unchecked authority.

The leakage was self-inflicted, while public debt climbed and the public was told to tighten its belt because of the diamond slump.

The question now is, how was this allowed to happen? Who orchestrated and executed it?

The answers lie in the Alvarez & Marsal Middle East Limited summary report of the National Foreign Audit Programme.

 

 Integrity and Misconduct

 

This theme covers suspected fraud, corruption, collusion, abuse of office and improper influence. 

This was not only focused on weak controls, but there were also clear indicators of internal misconduct.

Recurring patterns emerged such as collusion, conflict-driven decisions, payroll irregularities, preferential treatment and improper influence over procurement, lending, allocation and spending.

The reports note recurring patterns in collusion, conflict-linked decision making, payroll irregularities, preferential treatment and improper influence over procurement, lending, allocation or spending decisions.

These were often carried under exceptional mechanisms such as variations, virement, emergencies, waivers and special approvals, all intended to bypass set controls and policy.

Key decisions were swayed by informal relationships, political ties or personal associations and officials used position and discretion to steer decisions outside formal processes.

There was blatant favouritism toward specific suppliers and individuals, repeated reliance on variations and undisclosed or poorly managed conflicts influencing procurement, lending and allocations.

When whistleblowers spoke up, they faced intimidation or professional isolation.

 

Procurement Gone Wrong

 

Procurement was the most severe area of concern across the entire audit. 

This went beyond minor process defects and in several infrastructure-heavy sectors, it was the main route for financial exposure, poor value for money and suspected corruption.

There was a pattern of non-competitive procurement across multiple entities, where emergencies were declared without clear basis.

Quotation processes were used beyond appropriate thresholds and open and competitive tendering was repeatedly avoided.

In some cases, tenders were classified as confidential or operationally sensitive, which weakened or bypassed normal controls.

According to the summary report, the audit found indicators of fronting, collusion and conflict-linked procurement risk, while the same suppliers kept winning, apparent links between bidders and recurring involvement of the same officials across high-risk procurement.

Also found were instances of potential payment for goods or services without delivery and unsupported invoicing or certification of work without verification.

 

When Governance Lacks Governance

 

Weak governance was identified in every entity audited, which included the inability of institutions to oversee management, scrutinise significant decisions, respond to control weaknesses and protect public resources.

Some state-owned enterprises operated for long periods without properly constituted or quorate boards. 

In others, board appointments lacked the skills or experience needed for oversight.

In several entities, internal audits were under-resourced, sidelined, ignored or their recommendations were not acted upon, with no consequences for such actions.

Governance was also found to be weakened in boards, management, parent ministries, regulators and internal controls, with suggestions that some may have been deliberately weakened, bypassed or rendered ineffective.

In several audits, staff described environments in which senior management decisions were not effectively challenged, whistleblowers were not protected, some were harassed or threatened, internal critics were isolated and obvious problems were allowed to continue.

Such a combination of weak structure and weak culture created a permissive environment in which poor decisions, irregular procurement, financial distress and suspected misconduct persisted.

 

Financial Management and Systems and Records

 

Financial management failures were especially pronounced in SOEs, public bodies, ministries with large budgets and lending institutions.

Findings included weak cash flow control, poor budget discipline, unsupported disbursements, delayed reporting, weak working capital management and poor links between budget, procurement and expenditure.

In a number of entities, financial pressure was itself a risk to control. 

Reliance on government support, persistent losses, mounting public liabilities, liquidity constraints and delayed statutory obligations contributed to short-term decision-making and weakened financial discipline.

In lending and development finance activities, the findings included high levels of non-performing loans, departure from lending policy, weak recovery processes and preferential treatment of borrowers, including cases involving politically exposed persons or otherwise connected parties.

As for systems and records, it affected accountability across multiple other themes and was recurring across the programme.

Weak systems and poor record keeping weakened the ability of officeholders to control public resources, evidence decisions and account for the use of public money.

In some entities, key records could not be produced. 

In others, records were held across different systems, locations and teams, in a way that made it difficult even for the institution itself to maintain a reliable account of its decisions, obligations, assets and expenditure.

Where the underlying record was incomplete or unreliable, it became harder to verify whether decisions were properly authorised, fairly made, accurately recorded or capable of later challenge.

The audit also found that some records may have been moved, concealed, reconstructed or otherwise interfered with.

 

People of Interest and Referrals

 

The audit identified 80 referrals relating to contracts, payments and other spending with a gross value of approximately P160 billion and, on preliminary estimate, a loss or damage of approximately P33 billion.

The indicative figures do not capture the full public cost of the matters identified, as in some cases the wider cost may be broader and extend beyond the contract, payment or asset value reviewed.

The referred matters involved more than 80 senior office holders or decision makers, including, among others, ministers, deputy ministers, permanent secretaries, chief executives and board members.

Also flagged are 150 contractors and suppliers engaged by government, SOEs and public bodies.

A significant feature of the referral’s population was the recurrence of certain individuals, counterparties, relationships and patterns across multiple matters, entities and time periods.

In some instances, the patterns were consistent with indicators of corruption and improper misconduct, thus strengthening the need for structured follow-up investigations, including analysis of beneficial owners, related party links, repeat contracting patterns and potential asset flows.

Referrals were sent with referral packs to assist the authorities in moving quickly from forensic audit findings to targeted action by relevant authorities.ENDS