•The incident might cast Edward Ouko’s office in a bad light, coming barely months after the Council of Governors lamented ‘unjustified’ county audit reports.
• MPs at the committee said they would recommend action against the auditor if it emerges that they did not do due diligence on the NDMA query.
Image: DOUGLAS OKIDDY
MPs have questioned a ‘wrongful’ Sh4 billion query to the National Drought Management Authority by the Office of the Auditor General.
NDMA was reprimanded for failing to account for Sh1.7 billion in cash transfers to persons affected by drought, Sh2 billion National Drought Emergency Fund (NDEF), and Sh719 million meant for Ending Drought Emergencies (EDE).
NDMA chief executive officer James Oduor protested the claims to the MPs saying the agency provided documents supporting expenditure for the financial year 2016-17 audit.
The incident might cast Edward Ouko’s office in a bad light, coming barely months after the Council of Governors lamented ‘unjustified’ county audit reports.
Oduor said there was a long period of interactions where NDMA exchanged documents with Ouko’s office, including follow up meetings.
The agency boss told the Public Investments Committee chaired by Mvita MP Abdulswamad Nassir that they were dumbfounded by the audit’s outcome.
Oduor, after being prodded on whether he raised the concerns with the auditor over the report, said it was late as the matter was already before Parliament.
“Once it has reached your (MPs’) level we work on responses. But I can confirm here that the documents were availed during the audit,” the CEO said when he appeared before the team.
MPs at the committee said they would recommend action against the auditor if it emerges that they did not do due diligence on the NDMA query.
Nassir asked Ouko’s office to provide the committee with management letters, minutes of exit meetings and correspondences with NDMA during the audit.
“We can’t have reports being written that millions are missing yet someone did not just look at a box file,” the lawmaker said.
One such query was on Sh1.7 billion expended on Hunger Safety Net Programme (HSNP) where Ouko questioned criteria used to identify beneficiaries.
Oduor said they provided documents showing that NDMA was not directly involved in the cash transfer.
He added that the NDEF monies have not been used as the Act operationalising the fund is still before Parliament.
The OAG representative at the meeting said he suspected the documents were made available after the audit had been finalised.
“The query was settled after we verified the documents were in order. We shall bring the letters,” the auditor said in respect of bank transfer ledgers, MoU between the British Department for International Development and Financial Sector Deepening Kenya, and list of beneficiaries.
But Nassir warned that if the committee would find that Ouko’s office accepted the documents after the audit period, then they would have a case to answer.
“If you are going to tell me that those documents were availed before the due date, then there is something that did not go right,” the lawmaker said.
“First and foremost, there is the time of this committee. Our job here is not to sit down and listen to queries only to end up being told they have been resolved,” Nassir added.
MPs Justus Kizito (Shinyalu), Ahmed Abdisalan (Wajir North, PIC vice chair), Mohamud Sheikh (Wajir South), and Rashid Kassim (Wajir East) equally reprimanded the auditor.
“If the query was raised because of a contextual misunderstanding with the audit office, it is very unfortunate. If it was on the part of the agency, then we will punish them,” Abdisalan said.
“If it is as a result of a lack of contextual understanding on the part of the auditor we must recommend that this doesn’t happen again.”
For his part, Kizito asked: “Don’t you have timelines for submission of documents? How will we know that someone has cooked documents if they are provided out of the audit period?”
“The issue seems to be at the point of audit where the officers didn’t follow the trail critically. The documents are available with the donor,” Rashid said.
Mohamud said the question is whether procedures were followed of which anything to the contrary has to be explained.
The auditors’ representative said: “We have timelines for auditing. We need to confirm if the documents were submitted during the audit,” he said.
Documents on HSNP - a project implemented by NDMA, showed that DFID supported regular cash transfers of Sh771 million.
The donor also supported emergency scale-up cash transfers channelled directly to the beneficiaries at Sh609 million, monitoring (Sh167 million), evaluation (Sh91 million), as well as rights and grievances component at Sh103 million.
“DFID fund for cash transfers was managed by FSD which channelled the fund to the payment service provider Equity Bank,” the records show.
FSD is a specialised financial agency established by DFID in 2005 to handle the agency’s strategy of reducing poverty by providing financial services to Kenyans.
Oduor told MPs that Equity Bank wired the cash to the beneficiaries directly adding that NDMA only prepared - and provided for audit, payment instructions and payroll statements.
“Upon successful payment to the beneficiaries using DFID fund, FSD would submit payment confirmation letter to us,” the NDMA chief said.
“DFID retains all the original documents on the components it handles. We referred auditors to the donor when they raised this query,” he added.
HSNP was implemented in Turkana, Marsabit, Mandera, and Wajir in 2013 where each of the mapped households received Sh4,600.
The amount was set to increase by 15 per cent annually.
Households received Sh5,400 every two months in the last phase which ended March this year.