Sh300m unaccounted for at NYS—auditor

The National Youth Service is on the spot after an audit unearthed questionable expenditures on various items and projects to the tune of Sh307 million.

Among payments queried by Auditor General Nancy Gathungu in her latest report tabled in Parliament recently is gratuity to former Director General Nelson Githinji.

The report shows Githinji was paid Sh7.5 million by the service in form of gratuity, with the auditor saying it was irregular since the officer faced a court case.

“The payment was made despite the existence of a court case against the former director general,” Gathungu said in the report for the year ending June 30, 2020, putting the Matilda Sakwa-led agency on the spot.

“Consequently, the validity of the expenditure of Sh7,531,909 paid to the former director general in form of gratuity could not be confirmed,” the auditor said.

The service, which was riddled with controversies in the first term of President Uhuru Kenyatta’s administration, has also been queried over expenditure on fuel amounting to Sh49 million.

Gathungu said the payments were not supported by signed contract agreements between the service and the suppliers.

“This was contrary to the provisions of the Public Finance Management (National Government) Regulations, 2015. In the circumstances, the validity of the expenditure on fuel, oil and lubricants of Sh379,715,177 for the year ended June 30, 2020, could not be confirmed,” the auditor said.

The auditor has further flagged a Sh161 million expenditure made to the Food and Agriculture Organisation for desert control at Sh9.9 million, Sh6.5 million to the Ministry of Health for Covid-19 mitigation, Sh65 million to Kenya Railways Corporation.

“However, ledgers in support of the amounts were not provided for audit. Consequently, the accuracy, completeness and validity of the expenditure of Sh161 million on grants and subsidies could not be confirmed,” the auditor said.

NYS was also found to have irregularly hired a procurement consultant, who was paid Sh6.7 million, yet it had a director in charge of supply management.

Gathungu reported the specialist was appointed on a two-year contract by the Public Service Commission as an adviser.

“The roles set out by the Cabinet Secretary (Public Service) are similar to those carried out by Senior Deputy Director/Head of Supply Chain Management at the Service.”

“Further review of the Integrated Payroll and Personnel Database (IPPD) data capture sheet revealed that the officer was earning a monthly basic salary of Sh322,040, which was above the maximum threshold as recommended by the PSC of Sh315,700,” Gathungu said.

The auditor said the NYS did not obtain value for money on the recruitment due to duplication of duties.

Also flagged is a payment amounting to Sh70 million on hospitality and supplies, which largely comprised of allowances to a task force reviewing the agency’s pending bills.

Of the stated amount, Sh2.5 million was paid as task force allowances to 18-member NYS multi-agency pending bills verification committee constituted by the Cabinet Secretary.

Another Sh2.5 million was paid in form of task force allowances to members of staff engaged in the interviews.

Gathungu said the payments were not subjected to the Pay as You Earn as required by the Income Tax Act and Employees Guide to PAYE resulting in some overpayment.

“Consequently, the accuracy and validity of the reported expenditure on hospitality supplies and services of Sh70.7 million for the year ended June 30, 2020, could not be confirmed,” the report showed.

Taxpayers may have also not obtained value in the construction of a VIP stand at the NYS parade grounds in Gilgil.

The auditor pointed out infractions in the project, including an overpayment done after the structure’s design, was scaled down.

A contractor hired to put up the Sh14 million VIP stand was found absent from the site and the works remained incomplete yet the contract was paid in full.

“An examination of the bill of quantities revealed that the quantities in relation to the structural steel frame and roofing were scaled downwards to Sh3.2 million from Sh3.3 million, and Sh1.6 million from Sh3.2 million respectively.”

“This resulted in estimated costs of Sh12.7 million. The payment did not take into consideration the downward variations. Consequently, value for money has not been realised due to the delayed implementation of the project and failure to consider the downward variations in contract specifications,” Gathungu said.