Gov’t Unable To Account For Ksh24.5 Billion Meant for the Elderly, Vulnerable Groups
Auditor general Nancy Gathungu has raised a red flag over Ksh24.5 billion disbursed to vulnerable groups, specifically orphans and vulnerable children, the elderly and persons with disabilities in the financial year 2018/2019.
In her latest report, Gathungu says that the amount can not be properly accounted for, since the government and the banks involved cannot provide reconciliation reports despite the money having been disbursed to beneficiaries.
“The contract agreements signed between the State Department and the individual Project Service Providers (PSPs) require that the latter avails reconciliation reports showing the funds received and disbursed to the beneficiaries. During the year under review, a total of Ksh24,520,726,909 was disbursed to beneficiaries but payrolls for each of the service providers and respective reconciliations were not provided by Management for audit review,” said Gathungu.
Further, various reports including rejected credit reports, dormant accounts reports, performance reports, the balance returned to the principal by clawback, final reconciliation reports, the total amount of money received from the State Department, the total amount credited to beneficiary accounts, amount of funds withdrawn by beneficiaries on a monthly basis, noncollected amounts by beneficiaries and commission files both narrative and electronic detailing payments made, were not provided for audit review.
“Management has explained that it was unable to access the information, though it was enshrined in the contract, due to the confidentiality clause of the Banking Act. Consequently, the accuracy and completeness of the total amount of Ksh24,520,726,909 disbursed to the PSPs could not be ascertained as at 30th June, 2019,” she added.
Gathungu also faulted the state department for forcing beneficiaries to open bank accounts with a specific service provider, the Kenya Commercial Bank (KCB) to be specific.
“Towards this end, the State Department engaged the services of four financial institutions namely; Equity Bank, Co-operative Bank of Kenya, Kenya Commercial Bank and Post Bank as intermediaries to transmit funds to the beneficiaries,” said Gathungu.
“The contractual agreement with the PSPs provides for the beneficiaries to identify a convenient bank of their own choice. However, information from field audit inspections revealed that some beneficiaries were coerced into enrolling into PSPs they had not applied for. The affected beneficiaries stated that their accounts were opened at KCB without their consent.”