Ouko queries creation of Sh4bn relief fund
The National Treasury is on the spot once again after it emerged that it irregularly set up a Sh4 billion relief fund which might have been embezzled.
The State Department for Special Programme on behalf of the government signed the agreement with World Food Programme (WFP) on June 9, 2017, where WFP agreed to facilitate the implementation of the emergency transfers targeting 1.3 million people affected by drought in 13 arid and semi-arid counties.
The signing of the agreement came after the government declared drought and famine in these areas a national disaster.
However, according to Auditor-General Edward Ouko, there is no documentation to support the establishment of the fund and how WFP was procured as the service provider for the fund as required by the Public Finance Management (PFM) Act.
NO ACCOUNTABILITY
The absence of the required documentation, according to Mr Ouko in his audit report for the fund for the year ending June 30, 2018, implies that the budget allocation and its appropriation was illegal.
“This is inappropriate utilisation of public funds as the section of the fund, including mode of operation, have not been done in line with the existing laws,” Mr Ouko says of the report which is currently before the National Assembly.
“In consequence, the legality and validity of the operations of the fund could not be ascertained,” Mr Ouko added.
The implementation of this programme was to be in two phases: July to August 2017, and September 2017 being the second phase when Sh2 billion was released by the government.
During the year under review, the government released another Sh1.9 billion but the report notes that it is not possible to determine the exact amount of disbursements that each house was to get.
LEGAL GUIDELINE
No accountability documentation, including the details of beneficiaries as well as confirmation or acknowledgment of receipt of the cash by the beneficiaries, were provided for audit verification to show how WFP utilised the funds.
According to the regulations governing the PFM Act, the Treasury Cabinet Secretary is required to provide for management, operation and winding up procedures in the guideline before a public fund is established.
But this was not the case, meaning that the then Treasury CS Henry Rotich blatantly violated the law.
“Information available indicates that the fund was established at unspecified date in 2017 after the drought in parts of the country was declared a national disaster in February 2017,” Mr Ouko says.
Notwithstanding that, WFP was required under the agreement to submit a monthly return on all expenditures, no such returns had been filed as they were not availed to the auditors.
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