Auditor General Nancy Gathungu has recommended appropriate action be taken against any individual who may have been involved in the massive financial fraud ad the department
Auditor General Nancy Gathungu has revealed how some officials at the Department of Social Protection resurrected 7,577 dead people and paid them Ksh. 254 million Inua Jamii funds.
The Auditor-General accused the officials of lining up their pockets by stealing funds meant for the elderly by using the dead to steal. In her recently released report, she said: “The money was to be disbursement through the Inua Jamii cash programme to the elderly, adding that there was an unexplained payment of Khs. 254,702,000 between the years 2017 to June 30, 2021.
The report says between 2019 and the end of last year the treasury disbursed more than Khs. 110 billion towards the programme.” Inua Jamii is one of President Uhuru Kenyatta’s key projects mooted by his administration during his first term in office.
The Auditor General’s office has consistently raised queries regarding the registration and disbursement of funds to ‘ghost’ beneficiaries for a long time. It is the public domain that the Department of Social Protection has for many years faced scrutiny as evidenced by the reports presented before the National Assembly. Auditor General Nancy Gathungu has recommended appropriate action be taken against any individuals who may have been involved in the massive financial fraud.
Ms Gathungu said the audit report on beneficiaries conducted in November 2021 exposed the fact that the payments at the department were erroneous and queries by her office could not be answered appropriately by the officers responsible. “The errors were noted in the databases of cash transfers to older persons (OP-CT), orphans and vulnerable children (CT-OVC), and persons with severe disability (PWSD-CT),” she documents in her report to Parliament.
Financial service providers, mainly commercial banks also came under criticism for how they ended up earning up to Khs. 15 million in commissions charged on the irregular payments “to deceased beneficiaries whose basis has not been explained”
The financial services providers, mainly commercial banks also came under criticism for how they ended up earning up to Khs. 15 million in commissions charged on the irregular payments “to the deceased beneficiaries whose basis has not been explained”. The auditor general’s report says: “In the circumstances, the propriety, accuracy and completeness of Shs. 269,984,120 utilized cash transfers for the year ended June 30, 2021, could not be ascertained.” She went on to reveal that the department is operating without a functioning internal audit section despite the huge amounts of cash it deals with annually like mentioned above, which is not supposed to be the case according to the law and public office regulations.
The Audit Report documents: “During the year under review, no internal audit report was prepared and there was no proof of internal controls to detect and prevent errors. There was no assurance that appropriate institutional policies and procedures were followed.
It goes on to document that: “There was no evidence that the management’s decisions were backed by any evaluated adequate reliable auditors or otherwise. She also flagged instances of diversion of funds during the period to June 2021, singling out some Khs. 54 million that was diverted irregularly.”
“The money was used for payment to merchants and suppliers, the Kenya Revenue Authority (KRA) and employees for the State Department without authorization,” added Ms Gathungu in her report.
At the same time, while orphans and the elderly suffer delayed remittances, many more people remain locked out of the programme. The audit revealed that the department was holding Khs. 462 million that should have been disbursed to the needy. The Auditor-General documents: “No explanation was provided as to why the amount of Shs. 461,622,844 was not transferred to beneficiaries. Consequently, it was not possible to confirm that value for money was obtained from Shs. 461,622,844 transferred to the four holding bank accounts.”
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