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Auditor flags undeclared Sh1.3bn idle cash at ASALs department

The World Bank money was meant for projects in communities that support refugees

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by The Star

News18 July 2022 - 15:00
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In Summary


•The money was meant to improve access to basic social services.

•The project was also found to have unpresented cheques to the tune of Sh887 million.

Auditor General Nancy Gathungu on December 6, 2021.

At least Sh1.3 billion meant for communities that support refugees lay idle in various bank accounts at a time when the beneficiaries needed the money.

Auditor General Nancy Gathungu has queried the Department of Arid and Semi-Arid Lands (ASALs) for failing to disclose the amounts in their books.

This was after the department reported that the World Bank-funded Kenya Development Response to Displacement Impacts project had a cash balance of Sh145 million.

Gathungu said the balance excluded the Sh1.3 billion held in various project implementation groups’ bank accounts in the five constituencies where the project is being implemented.

The money was meant to improve access to basic social services, expand economic opportunities, and enhance environmental management for communities hosting refugees.

The project aims to promote cohesion by addressing drivers of conflict and address gender-based violence in constituencies in Turkana, Wajir, and Garissa.

The audit covering the financial ending June 2021 revealed that Wajir South and Turkana West constituencies had unused Sh364 million and Sh81 million respectively.

Up to Sh401 million meant for interventions in Daadab were not utilized as at the time of the audit, Sh280 million in Lagdera, and Sh227 million in Fafi.

“In the circumstances, the accuracy and completeness of the cash and cash equivalents balance of Sh145,125,454 as of 30 June 2021 could not be confirmed,” Gathungu said.

The project was also found to have unpresented cheque to the tune of Sh887 million, of which Turkana's alone amounted to Sh801 million.

An unpresented cheque is one that has been written and accounted for but is yet to be out by the bank from which the money is being paid out.

In the audit, Gathungu queried cheques totalling Sh807 million whose specific beneficiaries or the groups were not provided for audit review. The cheques were raised in the name of the regions.

“Further, the dates when the specific cheques were raised during the year under review were also not provided for audit review,” the auditor said.

“It was therefore not possible to establish the identity of stale cheques,” Gathungu added, concluding she couldn’t confirm the propriety and validity of the payment of Sh807,465,940 for unpresented cheques.

 The auditor has also queried low absorption of project funds in respect of expenditure on items the implementation team had budgeted for.

Whereas the budget for basic wages, hospitality, fuel, other operating expenses, routine maintenance and purchases of vehicles was Sh1.19 billion, only Sh808 million was used, leaving a balance of Sh383 million.

“The overall absorption of 68 per cent means that the citizens did not get the value for money due to the delayed implementation of projects,” Gathungu said.

The audit further revealed that the management may have handed projects worth Sh48 million to contractors who did not submit mandatory requirements.

Gathungu said there was an irregularity in the face of findings the contractors did not have tax compliance certificates, National Construction Authority (NCA) registration certificates, and tender evaluation minutes.

The Public Procurement and Asset Disposal Act, (2015) says the records of a procurement process shall include the proceedings of the opening of tenders, evaluation and comparison of the tender proposals or quotations including the evaluation criteria used as prescribed.

“Consequently, the management was in breach of the law,” the auditor said, further flagging an expenditure of Sh29 million on a management information system that is yet to work.

“The system could not provide expected reports and information, especially financial information which continued to be relayed or provided in manual form,” Gathungu reported.

“Under the circumstances, it was not possible to confirm that the value for money was obtained from an expenditure totalling Sh29,156,005 paid during the year ended 30 June 2021.”

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