The Auditor General has questioned the legality of a mysterious bank account operated by the Ministry of Interior where Sh8.6 billion was deposited without authority from the National Treasury.
In his report, the Auditor General also questions the spending of over Sh2.7 billion by the Office of the President in the past three years.
On the Office of the President, Auditor General Edward Ouko indicates the spending of part of the billions of shillings set aside for confidential expenditure by the Presidency cannot be vouched for since it is shielded from scrutiny.
In the report tabled Wednesday, Mr Ouko says rogue officers may have taken advantage of the loophole to misappropriate the funds.
A breakdown of the Sh2.7 billion by the auditor shows in the past three years, the Presidency spent Sh685.7 million in the 2013/2014 financial year, Sh937.5 million (2014/2015) and Sh1.1 billion in 2015/2016.
“Although the presidency has provided certificates to support the expenditure in accordance with the regulation and has explained, the purpose and particulars of the expenditure cannot be made public and unsatisfactory matters regarding the expenditure have not been resolved,” said the Auditor.
The report also raises concerns that payments totalling over Sh165.6 million was made to companies for supply of motor vehicles, but the same was not posted on the Integrated Financial Management and Information System (IFMIS) ledger.
The Auditor in his report further questions why Sh105 million was charged to item 6780101- general suspense account without verifiable source documents that indicate the approved allocation as required by the law.
“In this regard, I am unable to confirm that the confidential expenditure incurred on motor vehicles and other payments or charge to general suspense account was lawful and that value for money was obtained as required under the Constitution,” reads the report.
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At the same time, Ouko notes although there were pending bills worth Sh271 million as at June 30, 2016, bills amounting to Sh61.5 million were never supported by invoices, delivery notes, contract documents and local purchase orders.
“Consequently their validity, legality and accuracy cannot be confirmed,” reads the audit report.
The report also raises the red flag on transactions in the Ministry of Interior accounts.
In his report for the financial year 2016, the Auditor Edward Ouko says the ministry transferred Sh8,696,113, 050 to an account at the Kenya Commercial Bank (KCB) between June 2013 and January 2017 without authority from treasury.
He says that the Interior Ministry opened and has been operating the said account contrary to the Public Finance Management (PFM) Act, which requires that it first seeks the authority of the National Treasury to operate such bank accounts.
“The ministry opened and has been operating Bank Account No 1109896077 at KCB contrary to Section 28 (1) of the PFM Act,” states the Auditor in his report tabled Wednesday.
Further compounding the mystery of the account, Ouko says the ministry does not maintain a cash book, bank reconciliations and related payment records in support of cash transfers and withdrawals from it, contrary to the PFM Regulations.
The audit of the ministry’s financial statements for the year ended June 30, 2016, the Auditor notes, did not disclose balances in the said account.