National Youth Service scam triggers more questions

NYS recruits at Gilgil last year. (PHOTO: BONIFACE THUKU/STANDARD)

The taxpayer could be losing billions of shillings through manipulations of the Integrated Financial Management System (IFMIS). However, it is what experts have described as shoddy investigations into the scam, the possibility of massive cover ups and vulnerability of the systems that has raised eyebrows.

Firstly, the investigations report listed 22 suspects largely junior and middle level managers whose access to money to the tune of Sh791 million, is not possible without the knowledge and approval of their seniors.

“Accountability comes from the top, the AIE (Authority to Incur Expenditure) holder. There is no way Sh791 million can disappear without the knowledge of the chief executive of the institution,” said Institute of Certified Public Accountants (ICPAK) chairman Fernandes Barasa.

Experts suspect that detectives could have been sucked into a high-level cover up and thus failed to properly investigate all leads. There are also allegations that they could have deliberately disregarded crucial evidence, sacrificed junior officers and even crucified whistle blowers.

A curious observation is the listing of NYS Deputy Director General Adan Harakhe, who was the whistle blower on what has now been confirmed to be a mega scam.

Harahke was appointed AIE holder in the National Youth Service in March this year.

The mysterious theft of Sh91 million was perpetuated towards the end of last year and early this year.

This seemingly organised crime by a chain of cartels was clearly an ongoing activity even before Harakhe, who raised concern that led to investigations into the attempted theft of Sh695 million, assumed his current office.

NYS Director General Nelson Githinji was the AIE holder during that period although his name does not feature in the Directorate of Criminal Investigations (DCI) report.

Githinji did not respond to our calls but sources at DCI indicated to us that he denied knowledge of the movement of the said amounts in a statement he recorded with security officers.

“We want whistle blowers protected. This is an area of concern and we are advocating protection of whistle blowers through enacting effective laws that can be put in place to achieve this objective,” said ICPAK chairperson.

DCI boss Ndegwa Muhoro however said his officers were diligent in undertaking the investigations.

“The officers who were carrying out this investigation did their job as expected and in accordance with the law,” he said.

In a previous interview with this newspaper, shortly after details of the attempted fraud began to come out, Harakhe said his attention was captured by inexplicable activities within the IFMIS system part of which details indicated he had approved projects he had not even seen or discussed.

For instance, approval of payment vouchers in IFMIS is accompanied by hard copies that are also signed by relevant officers.

But where approvals were alleged to have been made by Harakhe, there were no accompanying hard copies.

Hanging questions in the DCI report and vulnerability of the IFMIS system points to a corner-cutting public service that is either incompetent or largely negligent in a hurry to close deals.

This points to the fact that the latest official revelation of the loss of a whopping Sh791 million in less than a year is only an example of how public officers are linked to organised crime that has perpetuated shameless plunder of public coffers.

A fortnight ago, President Uhuru Kenyatta directed that all state departments must process procurement procedures electronically in a bid to fight graft.

However, IFMIS is turning out to be one of the most vulnerable government systems that cartels are manipulating and exploiting to siphon taxpayers’ money.

On Friday, Devolution Cabinet Secretary Ann Waiguru announced that following an inquiry by the Directorate of Criminal Investigations (DCI), it was confirmed that Sh791 million had been stolen by unidentified persons.

“The DCI confirmed that they have completed investigations and have submitted the file to the Director of Public Prosecution for further action,” she said.

“As the minister responsible for NYS, I wrote to the DCI on June 5, asking them to investigate various IFMIS transactions that had been reported suspect. To avert financial loss, the Authority to Incur Expenditure (AIE) holder flagged the matter immediately and this prompted my action.”

Similarly, another Sh695 million was saved after NYS Deputy Director General Adan Harakhe discovered manipulations in the IFMIS system and reported the same to authorities.

It is this report by Harakhe and the subsequent reports filed with CID by Cabinet secretary Ann Waiguru that triggered the investigations into the NYS financial systems.

Experts now believe NYS is a victim of failed internal control mechanisms that have seen crooks from within and without the government body exploit the loopholes to siphon funds from public coffers.

“This is a matter of internal controls. We expect the CEO to be at the top when it comes to internal controls,” Barasa said. “ICPAK emphasises having proper control mechanisms that must be adhered to.”