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How impunity, greed conspire to rob the disabled

‘The Standard On Saturday’s Jackson Siror and KTN’s Investigative Reporters Purity Mwambia and Sophia Wanuna unearth a scandal that has seen millions of disabled funds siphoned into private accounts

Allegations of massive corruption are swirling around several organisations that receive funding from the Government to help people with disabilities.

Hundreds of millions of shillings are unaccounted for – and possibly stolen – thanks to a flawed and wasteful disbursement process. The money comes from a three-year-old financial kitty for persons with disabilities, run by the Ministry of Gender and Social Development.

Rather than go to its intended recipients, some of the money often disappears in the hands of crooked activists and officials. Investigations by Standard Group reporters show that Government officials are aware of the widespread theft, fraud and mismanagement, but have done little to stop it.

These shocking findings are at the heart of a two-part series of television features that airs on KTN this weekend, beginning tonight during the KTN Leo and KTN Prime bulletins. The series is the latest instalment of KTN’s Jicho Pevu and Inside Story segments.

Gender Minister Naomi Shabaan admits weaknesses in the monitoring of the funds, and says these are “a huge concern for the Government”.

“It is true that we have a problem with monitoring and evaluation,” Dr Shabaan says. “That is something we need to strengthen.”

While choosing not to comment on how much money is lost, she said she had instructed parastatal bosses involved to “follow up” on the money out there.

Social protection

In the last three financial years, Treasury has set some Sh1.8 billion aside for social protection measures aimed at the disabled. Much of the money went to the National Development Fund for Persons with Disabilities (NDFPWD), a State corporation. Controversy has trailed the use of this money beginning with some Sh650 million set aside in 2009/2010 for an interest-free business creation revolving fund.

Following confusion as to whether the law allowed this, some of the money set aside for the revolving fund was given away as irrecoverable grants. More contentious, however, was the disbursement of funds on the approval of the Board of Trustees, the fund’s top management organ. Millions of shillings were dished out to non-existent organisations and ‘ghost’ recipients. A large portion of the fund went to district-level officials in form of advance payments (imprests) for work never done.

The board of the National Council appears to have approved payouts without ascertaining the viability of proposed activities, creating room for misappropriation.

The Standard On Saturday has seen numerous official documents (including court papers, secret correspondence and bank documents) appearing to confirm claims of massive irregularities in the NDFPWD. Some officials of the National Council have been colluding with local NGOs to raid the kitty.

Our investigations have determined, among other things:

•             that ghost projects, workshops and organisations have been used to siphon millions of shillings from the fund;

•             that some fund officials collude with NGOs to launch and approve these non-existent projects;

•             that fund records are falsified to show millions of shillings in payments to various institutions that were never disbursed;

•             that millions disbursed to grassroots organisations are irregularly withdrawn in cash from bank accounts;

•             that few lists exist to show who, if anyone, this money is paid to;

•             that millions are wasted creating databases of people who need help which exclude many of those in greatest need;

•             that many of the fund’s trustees also run organisations that receive the money, creating a serious conflict of interests;

•             that a Cabinet minister aware of the risk of theft tried to divert money meant for one such group to a CDF bank account she controls;

•             and that the Government has little ability to track the use of the money.

Court documents show more than 100 organizations that have received funding from the council had no physical address. In Nakuru for instance, a group going by the name Rongai Gender Concern lists its address as the local chiefs’ office. A cell phone number provided is no longer in service. This raises questions as to how the State would identify the receiver?of the funds.

As a result of these and other issues, the Sh1.8 billion set aside in the last three years is yet to have an impact for most groups working with PWDs. “We don’t understand what goes on with the money,” says Mary Wangari, who works with disabled people in Githunguri, Kiambu County. “Many disabled groups are not helped.”

Many of the people in greatest need do not have access to the money. As KTN’s team will show in the TV component of this joint investigation, this was true of Salim Hassan, a 13-year-old boy in Mombasa County born with Downs Syndrome into a family of six too poor to provide him with proper care.

It was also true of 17-year-old orphan Mwanahamisi Mohammed, also in Mombasa, who must care for her mentally handicapped brother Juma, 13, and three other siblings of school-going age.

Statutory bodies

 Neither of these two were shortlisted on a register of those in greatest need created by the Gender Ministry.

According to documents in our possession, millions of shillings were spent to identify just 2,100 people with disabilities nationwide (ten in every constituency) that should get help. Ministry officials cannot explain how their lists left out some of the most desperate cases.

Despite this, statutory bodies and Government departments mandated to provide for the disabled continue to squander the limited funds they get.

The NCPWD, for instance, has set aside Sh10 million from their budget to fund 12 meetings.

Millions more have been wasted on professional services that the fund is, by law, barred from paying. In 2009, for instance, a dispute arose over who should get some Sh200 million allocated in the national Budget to “people with disabilities and the elderly” (see related story).

The Kenya Society for the Mentally Handicapped (KSMH) took NCPWD to court challenging their use of the money. United Disabled Persons of Kenya (UDPK), an umbrella body representing several organisations, enjoined itself to the suit as an interested party. The case was sent to arbitration.

The lawyers hired by UDPK to represent them in court asked for Sh7 million shillings in legal fees. UDPK did not have the money.

A plot was then apparently hatched last year between some NCPWD and UDPK officials to draft a proposal seeking Sh15 million for a ghost project.

NCPWD would approve the proposal and release the money to UPDK.

Sh7 million would be diverted to pay the lawyers, while the remaining 8 million shillings would be divided among officials of the two bodies involved in the plot.
Legally, the fund’s guidelines bar paying for expenses incurred in workshops or operational costs such as fuel, rent and salary payments.

Reliable sources say UDPK went around this by disguising their funds request with the proposal.

A copy of the document obtained by the Standard/KTN team shows budget items such as “cost sharing”, for which over half a million is requested. The money appears to have been paid through UDPK’s Laikipia branch, United Disabled Persons Laikipia.

KTN’s investigative reporters managed to get a copy of the fake proposal and confronted National Council Director and Board Secretary Phoebe Nyagudi with it.

She admitted having seen it but claimed she was not aware of any plot to divert the money. She also could not confirm whether or not the money was paid out.

UDPK treasurer Peter Wango also denied everything. But minutes after a KTN team left his office, he wrote a damning letter to chairperson Hellen Obande, which we have since obtained.

“Hellen, the cat is out of the bag and the anti-corruption (commission) is on the trail investigating why UDPK paid lawyers to defend NCPWD using council money,” Wango wrote. “They even have the copy of a proposal you sent… Be alerted (sic) on how to cover (up) the issue … Please tear this letter after reading and find ways to cover the money used to pay lawyers… Also alert Phoebe (Nyagudi) if she is to find ways … to solve this issue.”

Obande, to whom the letter was addressed, rejected our request for an interview. Wango and Nyagudi will not speak to us on this matter any more.

In an earlier interview, however, Nyagudi admits that some of the groups that receive funding from NCPWD do not use the money as intended. Despite this, procedures for giving out funds remain lax, with little due diligence and only a memorandum of understanding to guide spending. 

In one embarrassing case, NCPWD officials accepted hotel accommodation from an organisation seeking funding from them, even after being told its founder was being investigated by KACC for alleged fraud.

The group, DT72 International, is now being investigated by KACC over money it accepted from NCPWD for projects in Mombasa.

Its founder, former Olympian Dick ‘Tiger’ Murunga is being sought by creditors who say he has been raising money and running up debts without providing any services to the disabled.

“I didn’t know that it was a fake thing,” says Nyagudi, who is also the NCPWD Board of Trustees Secretary. “People do sponsor us… We didn’t see anything fishy about (letting DT72, which was seeking money from us, pay our hotel bills).”

Founded in 2009, DT72 International proposed to set up Africa’s first homecare centre for paralympians, as well as a university and research centre.

The project, which would have included about 5,000 cottages, would have cost billions to build. The man behind it, however, has failed to deliver on a simple Sh27 million water project he had planned in Likoni.

Kenya Anti-Corruption Commission officials have been looking into fraud complaints about Murunga since well before he founded DT72. This did not stop NCPWD and the Government funding his project.

Confronted about their dealings with Murunga, Government officials and NCPWD heads trade blame over who ignored warnings from KACC. 

Numerous other examples of possible malfeasance are documented in court documents in the case challenging the use of the first NDFPWD allocation.

These raise concerns about how much is being done to ensure Government funds meant for social protection are not stolen or misused.

KTN will air the Jicho Pevu and Inside Story features that accompany this special report on KTN Leo and KTN Prime tonight.