Devolution CS Anne Waiguru on the spot over ministry’s expenditure

NAIROBI, KENYA: Devolution Cabinet Secretary (CS) Ann Waiguru is on the spot for failing to account for her ministry’s expenditure in projects, appropriation of funds and unauthorized lending.
As the ghost of National Youth Service (NYS) continues to dog the CS, the auditor general Edward Ouko has released a damming report of the finances of her ministry, where she is required to come clean and
account for the whereabouts’ of  billions of shillings.
Waiguru has been criticised for spending Sh 1.9billion as transfer to other county governments, which had not been budgeted for.
“The Ministry, therefore, did not adhere to the budget provisions and no explanations and mitigating measures were provided. Consequently, the propriety of the amount could not be confirmed,” said Ouko.
During the year under review 2013/2014, the Ministry acquired non-financial assets without disclosing the various classes to the tune of  Sh 8billion against a budget of Sh 11.3 billion,  resulting in an under expenditure of  Sh3.3billion.
“The supporting payment vouchers for the assets were not provided including a summary of fixed assets register,” said Ouko.
Ouko wants Waiguru to explain why the financial statement of NYS Mechanical and Transport Fund (MTF) reflects an amount of Shs.2.2 billion under non-current assets made up of Sh.834million for
commercial trucks, Sh 166million for small vehicles and Sh 1.2 billion for plant and machinery, has not been re-valued while others have not been depreciated.
“No reason has been provided by the management’s failure to re-value and depreciate the assets,” noted Ouko.
The auditor questioned why the ministry transferred Sh 2.8billion to other Government entities, which were not budgeted for.
According to Ouko, for instance, the transfer to Ministry of Land, Housing and Urban Development has not been supported and therefore the funds cannot be confirmed.
The auditor has criticized the CS over unauthorized lending for the NYS-MTF, where an amount of Sh 124 million was borrowed from the Fund account no. 1128674548 at Kenya Commercial Bank, Moi Avenue by the Ministry.
“The money had not been refunded to the Fund as at 27 April 2015. It appears there is no documented policy or authority given to borrow from the Fund,” noted the CS.
Ouko denounced Waiguru over the Sh 138 billion loss from the Fund for the year ended 30 June 2014 down from Sh 157 million in 2012/2013.
“Further the Fund reported uncollected debts comprising of domestic debts of Kshs.149,918,976.00, commercial debts of Kshs.671,153,508.00 and borrowings of Kshs.124,600,000.00 by the Ministry,” Ouko indicated in the report.
He continued, “The total debt owed to the fund was Sh 945million, which is approximately 27 percent of total reported equity of Sh 3.5billion.The long outstanding debts have an impact on the going concern of the Fund. No reason has been given by the management for failure to collect the long outstanding debts.” Waiguru’s ministry is also queried over a Sh 49 million meant for the construction of proposed flats at National Youth Service (NYS) Vocational Training Institute - Industrial area.
Ouko has censured the CS over the incomplete construction Project, which stalled at foundation level.
“The Ministry awarded the tender at an estimated cost of Sh.49,105,721.10 was required to last 52 weeks from 08 April 2013 to 07April 2014.
The auditor noted, “The Contractor was paid Sh7, 111,432.26 in respect of certificate and a physical verification carried on 17 February 2015, which showed that the work was abandoned at foundation level.”
The auditor’s report indicates that the information on site minutes were not provided for audit and the Project therefore appears to have stalled. “Further, the Ministry did not provide the contract documents for the ongoing construction works at the National Youth Service (N.Y.S) Institute of Business,” examined the auditor.
He continues, “Correspondences from the contractor indicate that the original contract period expired but there is no evidence whether an extension was given. Consequently, the continued works on the Project could not be confirmed.