• Fund could not explain the expenditure of Sh1.32 billion during the 2016-17 financial year.
• Ex-chairman and CEO (both now deceased) were chared in 2016 over the misappropriation of Sh180 million for the empowerment of the youth.
Image: FILE
The management of the Youth Enterprise Development Fund is once again on the spot over illegal and unexplained expenditures amounting to more than Sh1.5 billion.
The latest report by Auditor General Edward Ouko has exposed several illegal and unsupported expenditures by the board and the secretariat that could have been used as avenues to siphon public funds.
In the 2016-18 report tabled Parliament by Majority leader Aden Duale last Thursday, the Fund could not explain the expenditure of Sh1.32 billion during the 2016-17 financial year. This includes loans issued to different youth and women groups.
“Out of the trader balance of Sh1,997,889,427, only Sh673,499,867 is supported by detailed listings leaving an unexplained and unreconciled balance of Sh1,324,389, 560."
The auditor also doubted the accuracy of Sh673.49 million the Fund supported, noting that the amount did not tally with the gross loans advances as reported in the financial statements.
YEDF has been on the headlines in the past over corruption scandals involving its top managers. Ex-chairman Bruce Odhiambo and CEO Cathrine Namuye (both now deceased) were chared in 2016 over the misappropriation of Sh180 million for the empowerment of the youth.
In 2009, the Fund was on the spot over alleged unlawful granting of Sh300 million loan to a Canadian non-governmental organisation–Enablis Entrepreneurial Network.
Ouko also flagged Sh11.93 million the Fund illegally used to hire a law firm to institute recovery of some Sh100 million. The money had been advanced to Rafiki Microfinance Bank for onward lending to youth groups that never happened.
According to the auditor, hiring the lawyers was unlawful as the Fund did not seek the approval of the Attorney General are required by law. Further, the law firm was contracted through restricted tendering.
“The contract document used to procure the services of the firm and to support the payment had expired on June 30, 2016, and was therefore not valid,” the report reads.
Further, the Fund spent Sh3.71 million (more than 50 per cent) in legal fees to recover Sh7.5 million from a loan defaulter.
Ouko’s report further indicted the board that exited office in 2016 for failing to back the Sh1.98 million Ipads that were purchased with taxpayers’ money. Also flagged were mobile phones worth Sh400,000 that were written off a year later. There was approval for the write-offs.
“The Fund acquired 50 laptops, desktop computers and printers in 2014-15. However, on verification, for laptops valued at Sh119,840 each and one printer valued at Sh87, 000 were found to be missing.”
Edited by R.Wamochie