• These functions give CS Treasury and in his official absence PS executive role to sign approve payments to state agencies and counties.
• Their arrests yesterday, means, no payment was made to the beneficial entity.
Activities at the Ministry of National Treasury came to a halt yesterday after the Director of Public Prosecution Noordin Haji the ordered arrest of two top officials over the Kimwarer and Arror dams scandal.
The two, Cabinet Secretary Henry Rotich and Principal Secretary Kamau Thugge are accused of inflating a commercial loan for the construction of the two dams in Kerio Valley by Sh17 billion.
The National Treasury manages national economic policy, prepares the government’s annual budget, and manages the national government’s public finances.
These functions give CS Treasury and in his official absence PS executive role to sign approve payments to state agencies and counties.
Their arrests yesterday, therefore, means, no payment was made to the beneficial entity. Either of their thumbs are needed to permit transactions in the Integrated Financial Management Information System (Ifmis).
The system has inbuilt checks and balances to ensure the segregation of duties such that no single user carries out an end-to-end transaction.
The approval hierarchy ensures security, accountability, checks, and balances and leaves audit trails at every point of action.
Junior staff told The Star that panic had gripped the ministry with most leaving the office early than usual.
Haji accused the two of committing economic crimes.
‘’Whereas the project was to cost approximately Sh46 billion, the National Treasury negotiated a commercial facility increasing the amount to approximately Sh63 Billion which is Sh17 billion more than necessary,’’ Haji said.
He added that the National Treasury entered into a facility contract in Euros while the commercial contracts were in US Dollars, therefore, occasioning further loss to the Kenyan Government through exchange rates.
The ODPP ordered the arrest of the two top officials at the exchequer together with 26 high ranking officers at the ministry and several heads at Kerio Valley Development Authority (KVDA) including managing director Kipchumba Kimosop.
Rotich had denied any wrongdoing when the scandal was first reported in media two months ago.
According to him, the government-owned Italian firm – Servizi Assicurativi del Commercio Estero (SACE) – was paid a Sh7.8 billion advance fee representing 15 per cent of the contract amount in line with Section 147 (1) the Public Procurement and Asset Disposal Act.
He further dismissed the alleged financing of the projects without submission of designs saying the procuring ministry – Ministry of East African Community and Regional Development – adopted a design-build model which he argued had been proved to be cheaper and effective.