Several Cabinet Secretaries (CSs) have been put on the spot over alleged corruption in their ministries leading to the loss of over KSh 4 billion from parastatals.
Lawmakers investigating spending by State corporations have unearthed how government entities could be used as conduits for stealing public money.
According to the ongoing investigation, some ten CSs are linked to ghost firms, which siphoned a whopping KSh 4 billion from parastatals.
National Assembly’s Public Investment Committee on Social Services, Administration, and Agriculture exposed the entities that could have acted as conduits for the theft of public funds.
The committee, for instance, revealed that the Kenya Sports Authority, whose management of funds was set to be audited, was non-existent.
According to a publication by the Daily Nation, several CSs flouted the law. “For the various financial years, a total of KSh 3.9 billion for the few state corporations that complied with the committee’s request for evidence had not been appropriately accounted for due to failure to prepare and submit statements for audit,” the report stated.
The implicated are Susan Nakhumicha (Health), Peninah Malonza (Tourism), Eliud Owalo (ICT), Zecharia Mwangi (Lands), Moses Kuria (Trade), Kithure Kindiki (Interior), Ababu Namwamba (Sports), Salim Mvurya (Mining), Njuguna Ndung’u (Treasury), and Mithika Linturi (Agriculture).
The MPs found that at least Sh4 billion cannot be accounted for by the agencies that have evaded scrutiny for years.
A total of 23 agencies have been indicted for failing to prepare and submit financial statements to the Office of Auditor-General.
There are genuine fears of a deliberate scheme by parent ministries to set up agencies with the sole purpose of stealing taxpayers’ resources.
Over the years, the committee said, some Sh2.6 billion allocated to non-existent firms was “unabsorbed and there was no documentary evidence availed to show that the unspent money was returned to the National Exchequer Account”.
Yet the revelation is only the tip of the iceberg, as lawmakers reported that just a handful of agencies were cooperative during the investigation, “yet there are more than 400 state corporations undertaking different mandates in their respective sectors”.
Even in instances where the entities are operational, their budgetary allocations and the money generated are placed under the illegal control of parent ministries, the MPs say in their report.
The committee uncovered opaque operations in which some entities lack designated accounting officers.
The investigation found that despite the corporations being established as Semi-Autonomous Government Agencies (SAGAs), deliberate micro-managing by the parent ministries undermined their operations and misused their budgets.
Failure to keep proper books of account means some entities do not have separate bank accounts and payment vouchers are prepared by their parent ministries’ finance departments, hence no clear distinction as to which payments relate to the agencies and the ministry.
It is also not clear how agencies that collected revenue, including from the public through member registration and subscription fees or received donor funding, accounted for the cash.
There have been reports of budgets of these nondescript state corporations being diverted to fund unorthodox programmes.
Lawmakers now want Parliament to reprimand 10 Cabinet Secretaries for failing to make operational dozens of corporations in their ministries and flouting several laws and the country’s Constitution.
The 10 Cabinet Secretaries, according to the committee report tabled in the National Assembly last month, have had a tight grip on the 23 state corporations, whose spending is questionable.