Njoroge on NYS: We never know who’s being paid and why

November 29, 2016
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CBK Governor Patrick Njoroge says their role is to ensure that government payments are done with finality and that they are irrevocable/FILE
CBK Governor Patrick Njoroge says their role is to ensure that government payments are done with finality and that they are irrevocable/FILE

, NAIROBI, Kenya, Nov 29 – The Central Bank of Kenya (CBK) has defended itself over the National Youth Service scandal maintaining that they are the banker of the government and they do not tamper with payment instructions.

CBK Governor Patrick Njoroge says their role is to ensure that government payments are done with finality and that they are irrevocable.

Njoroge says the CBK does not have access to who is being paid and why they are being paid as it is not in their domain.

“From our perspective as Central Bank of Kenya our responsibility is to maintain an environment through which the government can access first through IFMIS and then Internet banking and do operations and make transfer of payments to a particular vendor,” he stated.

He says it is the responsibility of ministries to authorise payments through the IFMIS system and the Internet banking system.

“National Treasury owns IFMIS and Internet Banking (IB) each ministry has three signatories for the IFMIS system and two signatories for IB, the responsibility is with National Treasury,” he stated.

About 28 banks were involved in effecting payments of National Youth Service funds dispatched to 11 companies.

Public Accounts Committee Chairman Nicholas Gumbo said they had expanded their investigations to cover more banks and financial institutions following fresh information from the Ministry of Devolution and Planning.

“Evidence before the committee clearly shows most if not all of the payments originated from accounts held by the Ministry of Devolution and Planning at the Central Bank of Kenya. In this regard we will be seeking this information from the Ethics and Anti-Corruption Commission (EACC) and Directorate of Criminal Investigations (DCI); we would like to know whether any investigations have been or are being undertaken with a view of establishing culpability or complicity on the part of the Central Bank of Kenya (CBK) or any of its officers in aiding and abetting the scandal,” Gumbo said earlier.

The committee will continue with the investigations to determine if there was any form of impropriety in the banks or companies dealings with the NYS which lost at least Sh1.6 billion in payments to suppliers.

Banks that the committee says received transactions running into billions of shillings directly linked to NYS during the period under review which ranges from 2013 to date, are Equity Bank, Diamond Trust Bank, Standard Chartered, Kenya Commercial Bank, Co-operative Bank, Barclays Bank, Family Bank Consolidated Bank, Fist Community Bank, Bank of Baroda, African Bank Corporation, I&M, Paramount Universal Bank, Transnational Bank, National Bank of Kenya, NIC Bank, Chase Bank Ltd, Bank of Africa, Housing Finance Ltd, Jamii Bora, Sidian, Gulf African Bank, Commercial Bank of Africa, Jairo Bank, Eco Bank, Fidelity Commercial Bank, CFC-Stanbic Bank, Old Mutual and Guarantee Trust Bank.

The House public finance watchdog team has further asked the Directorate of Criminal Investigation and Ethics Anti-Corruption Commission to investigate the matter.

This comes after the Financial Report Centre (FRC) at the beginning of this month reckoned that 15 of the country’s 41 banks raised 42 alerts over suspicious transactions relating to the NYS funds that were stolen through fictitious tenders.

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