Probe team wants action on Mutea Iringo over Sh2 billion drawn before poll

Kenya: A parliamentary watchdog has recommended the prosecution of a top State official over suspicious transfers of Sh2.8 billion from secret security accounts prior to last year’s elections and during the transition period.

Defence Principal Secretary Mutea Iringo is in trouble over his role as accounting officer of the Ministry of Internal Security in the financial year 2012/2013 that was under scrutiny by the National Assembly’s Public Accounts Committee (PAC).

The PAC report tabled in the House on Tuesday shows that the final days of the grand coalition government, which former President Kibaki led alongside then Prime Minister Raila Odinga, were a study in poor financial management, pathetic record keeping and blatant shirking of administrative responsibility.

According to the report, billions of shillings may have gone down the drain under the watch of permanent secretaries, and other accounting officers. Iringo, who then served as Permanent Secretary in the Ministry of Internal Security, is recommended for prosecution over Sh2.8 billion secret withdrawals - of which at least Sh130 million was withdrawn less than a week to the March 4, 2013 General Election.

Iringo is under the spotlight for his role in the operations of a secret ministry account, through which money was withdrawn for projects that had no documentation, and which were only classified as 'confidential'.

The ministry operated an unclear account, only known as 'p.com account' at the National Bank of Kenya, which ran parallel to the one at the Central Bank of Kenya, and through which Sh2,853,300,000 was irregularly withdrawn.

"The committee strongly rebukes and harshly reprimands the accounting officer for blatant flouting government financial regulations and procedures, and recommends that the Director of Public Prosecutions (DPP) prosecutes the said accounting officer and all other public officers involved in this breach of the law, regulations and procedures," the report partly reads.

At the height of the security ministry withdrawals, the report reveals, up to five withdrawals would be made in a day. For instance on February 26, 2013, Iringo presided over the withdrawal of over Sh130 million.

The committee recommends "a total revision and overhaul of the law, regulations, procedures and practices that govern all aspects of confidential expenditure in Government, to protect public funds from abuse on the pretext of confidentiality for national security."

"The nebulous p.com account operated by the Ministry of Interior at the National Bank of Kenya must be investigated with a view of having it closed... Treasury must act expeditiously on reforms and respect of accounting for confidential expenditure and should submit to the National Assembly a status update on action taken by December 31, 2014," the report recommended.

Although Iringo appears to have taken the flak for the mess at the security ministry, the practice of confidential expenditure under the guise if national security is a common practice in the country. It is, however, a departure from best practices in countries such as South Africa, where House committees are allowed access to documents detailing such expenditure.

Better management

Most ministries, including the office of the Prime Minister are cited for unsupported expenditures and pending bills, with the report recommending the establishment of better financial management systems.

Iringo was initially named Interior PS in 2013 when President Uhuru Kenyatta took over but was transferred to Defence ministry in August, this year.

 

He was moved at the height of a controversy after reports about suspicious transfer of billions of shillings out of security accounts during the transition period came to light. But the PS at the time denied his transfer had anything to do with the issue.

Opposition leader Raila Odinga had persistently claimed it was Sh15 billion that had been carted out of CBK in trucks but PAC then said its investigation wouldn't be swayed by figures bandied at political rallies.

 The PAC report paints a picture of ministries engaged in massive waste, poor maintenance of records and a blatant abuse of their offices.

State House is accused of paying an unnamed contractor over Sh105,000,000 for the construction of a petrol station and a workshop within its premise, before a unilateral decision was made to convert the project into office suites for presidential staff.

According to the report, Sh88,826,396 was paid to a contractor between May 2011 and June 2013, without any documentation. The payments were made through to 2013, although investigations by the committee revealed that the petrol station project stalled in 2011.

"The committee notes that various transactions raise serious questions, breached regulations, compromised value for money and possibly occasioned loss of public funds... Accordingly, the committee recommends that the accounting officer responsible for authorising the irregular payment of Sh88, 826.396 to the contractor without proof of work done be surcharged for the full sum of the public funds lost," notes the report.

The Ministry of Roads is accused of causing loss of Sh6,351,538 through cases it lost in court, with the Attorney General coming under focus for "perennial poor litigation" in defending public interest.

"The expenditure is largely attributable to poor performance by the State Law Office in defending public interest..." the committee noted.

PAC is expected to play oversight role over the expenditure of public funds by ministries and departments to ensure value for money and adherence to Government financial regulations and procedures. The 2012-2013 report was tabled simultaneously with the 2010-2011 and the 2011-2012 reports on Tuesday.

Ministry logo

Among the ministries that did not seem to have serious audit queries were those of Justice and Constitutional Affairs, and the Ministry of Information and Communication.

The report also raises questions on the financial accounts of the Judiciary, but explains that investigations are still going on.

The committee recommends that the then accounting officer in the Ministry of Higher Education be held responsible for Sh1,976,000 for unconfirmed expenditure on the purchase of 520 shirts and 520 blouses with the ministry's logo.

The report accuses the Ministry of Energy of holding more than one share each in Kenya Electricity Generating Company (KenGen) and the Geothermal Development Corporation contrary to the provisions of the Public Finance Management Act.