• He said the fund's management could not provide contract documents or justification.
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The Youth Enterprise Fund cannot explain suspicious expenditure of more than Sh15 million, Auditor General Edward Ouko has said.
After analysing the fund’s books of accounts, Ouko raised concern that taxpayers could lose millions in a number of irregular transactions which had no supporting documentations months after the payments were made.
He said the fund's management could not provide either contract documents, justification for restricted tendering and in some cases it made payments to firms using expired contracts.
The report revealed that the fund paid Sh8,220,000 to an advocate in 2017; this was after the contract document which was used to procure the services of the advocates and to support payment expired on June 30, 2016.
The law firm was to institute recovery proceedings for an outstanding amount of Sh100,000,000 and interest of Sh342,693 in respect to monies advanced to Rafiki Microfinance Bank for onward lending to youth groups that never happened.
The report further faulted hiring of private advocates without obtaining permission of the Attorney General contrary to the Constitution.
The 2016-17 report tabled by National Assembly Leader of Majority Aden Duale also pointed to a possible loss of Sh3,710,96 paid as legal fees covering demand and filing a suit against an intermediate defaulter with an outstanding debt of Sh7,500,000.
“No procurement details were provided for audit examination. The legal service provider was single sourced,” Ouko said.
He further cited another normally indicating the legal fee paid exceeded 50 per cent of the amount demanded or debt to be recovered.
The Auditor General also raised a red flag in regard to Sh804,932 affirmative funds which was only supported by cash receipts.
“No documents were attached to the cash receipts to show the procurement method used to obtain the goods or services paid for. In addition, an amount of Sh91,000 indicated to have been paid to participants had no listing signed off by recipients or details of how they were identified, invited and basis of setting the amount paid to each participant," Ouko said.