Connect with us

Hi, what are you looking for?



Audit reveals Sh4.2b fraud at Education Ministry

NAIROBI, Kenya, Jun 13 – An audit by The Treasury has revealed fraud amounting to Sh4.2 billion at the Ministry of Education under the Kenya Education Sector Support Program (KESSP) for construction projects.

Finance Minister Uhuru Kenyatta said on Monday that the forensic analysis conducted by his Internal Audit Department exposed numerous attempts to cover up the fraud that saw Sh1.9 billion failing to reach 512 primary schools for construction projects.

"The forensic trail revealed an attempt to cover up the discrepancy through manipulation of the cash books. The details of how it happened and the individuals involved are now available," Mr Kenyatta said.

The audit also unveiled discrepancies totalling Sh2.27 billion, which did not tally with the Ministry\’s records and bank account balances.

A further Sh3.1 million was deposited in bank accounts for schools, which did not have Teacher Service Commission (TSC) codes implying that the schools that received the funds were not recognised. The individuals behind the fraud subsequently withdrew the money.

The final forensic report, however, falls short of the initial Sh8.2 billion that the Treasury had said was lost in the scam. Eighteen senior officers at the Ministry of Education were suspended when the scam was first unearthed in 2009 for allegedly misappropriating Sh37 million.

The revelations prompted the international development groups that were funding the Free Primary Education Program to call for prosecution of those responsible.

The British aid agency, Department for International Development (DFiD) and the World Bank have sponsored KESSP to the tune of $90m (Sh7.2 billion) and $100m (Sh8 billion), respectively.

The misappropriation of the Sh4.2 billion accounts for one percent of the Sh489 billion allocated to KESSP from the 2005 to 2009.

Advertisement. Scroll to continue reading.

Meanwhile, a separate audit at the ministry of Medical Services discovered Sh1.6 billion missing through erroneous billing through the Kenya Medical Supplies Agencies.

Mr Kenyatta said the audit points to failure by the ministry to transfer funds meant for drug procurement as the main cause for the pending bills.

"The audit report specifically points out instances where the Ministry of Medical Services records of disbursements to KEMSA are not reconcilable with the amounts received in KEMSA\’s cashbook," he said.

A total amount of Sh886,693,090 was given to KEMSA against a budget provision of Sh2,943,848,735.

The two audit reports containing bank details and the people involved have now been handed over to the Criminal Investigations Department for further investigations and prosecution of the culpable persons.

The minister also revealed that together with the World Bank, they were conducting a preliminary investigation into suspected fraud and misappropriation of funds under the Arid Lands Resource Management project within the ministry of Development of Northern Kenya and Arid Lands.

He did not however disclose the amount of missing funds that was under review.

The Finance Minister said that the ministry would be strengthening its financial regulations, guidelines and oversight controls for all line ministries to develop an efficient financial management system.

Follow us on TWITTER @CapitalFM_Kenya

Advertisement. Scroll to continue reading.

More on Capital News