Sh12 billion could have been lost at NYS, Ouko says

President Uhuru Kenyatta inspects a guard of honour at National Youth Services College in Gilgil, Nakuru County. [Boniface Thuku/Standard]

Auditor General Edward Ouko has questioned expenditure of Sh12 billion at the National Youth Service (NYS).

In his report dated June 5, and tabled in the National Assembly by Majority Leader Aden Duale yesterday, Ouko says the country is at risk of losing another Sh2 billion at the Ministry of Agriculture through construction of water pumps and dams.

He says his office cannot confirm expenditure of 12.1 billion based on NYS' books of accounts.

 “…as reported in 2015-16, accumulated depreciation brought forward as of July 2016 was Sh2,178,510,682 and included unsupported adjustments of Sh3,662,814.25, relating to heavy machinery, and unaccounted for depreciation of Sh94,168,883. No documents have been provided in support of these movement to date,” says Ouko.

Shoddy deals

He adds: “Under the circumstances, the accuracy of non-current assets brought forward balance of Sh6,263,076,867, as at July 2016, and the closing balance of Sh5,779,547,213, as at June 30, 2017, cannot be confirmed."

The disclosure lifts the lid on what appears to be shoddy deals at NYS and points at what could be systematic plundering of public funds. NYS has, in the last couple of years, been receiving increased budget to fund its activities.

At least 43 individuals, among them Public Service and Youth Principal Secretary Lilian Mbogo, NYS Director General Richard Ndubai and senior NYS officers have been charged over the loss of Sh468 million.

“The statement of financial position as at 30 June 2017 reflects total non-current assets balance of Sh5,779,547,213 which includes an amount of Sh3,736,740,990 relating to plant and heavy machinery. However, the fund’s management has not valued the plant and heavy machinery for financial reporting purpose since inception,” says Ouko in the report.

“The total non-current assets balance of Sh5, 779,547,213 as at June 30, 2017 is not, therefore, fairly stated under the circumstances.” 

There was also an unsupported NYS debt of Sh18, 380,963.34 in the financial year 2013-14 as well as Sh124, 600,000 borrowed from Kenya Commercial Bank Moi Avenue by the ministry of Devolution and Planning in the same financial year.

Outstanding balance

“Information available indicates that there was no documented policy or authority given to borrow. During the year under review, an amount of Sh58, 839,952 was repaid leaving a balance of Sh429, 523,206.

"No justification has been provided for non-settlement of the outstanding balance of Sh429, 523,206 as at June 30, 2017,” says the report.

On the Agriculture ministry, Ouko says State Department of Irrigation spent Sh1 billion on acquisition of assets, which included Sh865 million for construction of small dams and water pans.

"However, the department did not provide an inventory of all the water pans and small dams indicating the physical location, the contractor, when it was constructed and their status," notes the report.

"Further, there were no technical reports such as feasibility studies, hydro-logical and environmental impact assessment carried out before commencement of the work," says Ouko.