Treasury suspends two donor projects

By Morris Aron

Treasury has frozen two World Bank-DfID sponsored education and special programme projects after internal audit reports indicated Sh131 million has been lost to fraud.

Following the development, Treasury has sacked 50 staff members of the two programmes, the Kenya Education Sector Support Programme (KESSP) and Western Kenya Community Driven Development (WKCDD), said to be linked to the scam.

Finance Minister Uhuru Kenyatta said the decision is to send signals that Treasury will not tolerate misappropriation of funds, particularly those involving donors and taxpayers money.

"The actions taken are to demonstrate how serious the Finance ministry is in dealing with graft," said Mr Uhuru.

KESSP, which falls under the Ministry of Education, has lost Sh83 million while WKCDD, under the Ministry of Special Projects, has lost Sh48 million.

The cases have also been referred to the Kenya Anti-Corruption Commission and Criminal Investigation Department.

Graft probe

Three other projects are also under investigation out of 25 funded by World Bank and DfID under the two ministries after reports indicated the implementation of the projects had ‘raised governance questions’.

DfID and the World Bank have sponsored KSSP to the tune of £60 million and $100 million and an additional $30 million for WKCDD.

The announcement comes at a time when Treasury is hard pressed for cash.

In the past Treasury has been accused of being run by a closed clique, which has been accused of entrenching corruption.

And the new development is bound to send wrong signals to the donor community given the number of fraud allegations unearthed by the Internal Audit Department.

But Uhuru is adamant the announcements indicate Treasury’s good progress in making donor funded projects fraud proof, under the on-going public financial management reforms.

"We will not relent in our quest to rid donor-funded projects of corruption," he said.