Youth Enterprise advisory team blames youth fund for Sh180m loss

Former State Corporation Advisory Council Secretary Jane Mugambi after she appeared before the National Assembly’s Public Investment Committee at Parliament Buildings yesterday. [PHOTO: BONIFACE OKENDO/STANDARD]

NAIROBI: An advisory council wants the entire board of the Youth Enterprise Development Fund (YEDF) held collectively responsible for the loss of Sh180 million.

Former State Corporation Advisory Council Secretary Jane Mugambi and Head of Governance and Management Services Simon Indimuli, yesterday told members of the National Assembly's Public Investment Committee (PIC) that the board erred in investing Sh400 million in Chase Bank without the approval of the Treasury. PIC is probing the fraudulent payment of Sh180 million to Quorandum Limited for ICT services.

The two also took issue with the agency's failure to recruit a substantive chief executive officer (CEO) and secretary since 2010 to provide guidelines to the board, which saw it capitalise on the anomaly to usurp executive functions.

They also censured State corporations for continuously flouting the Mwongozo Guidelines (Executive Order No.7) on good corporate governance practice leading to the loss of public funds.

The two registered the council's frustrations in ensuring prudent use of public funds through its advisory to the President and other State organs as stipulated in the State Corporations Act.

Ms Mugambi told the lawmakers that the council had recommended to President Kenyatta that YEDF, the Sh6 billion Uwezo Fund, Women Fund and Kenya Industrial Estates should be collapsed into one fund.

Despite training over 2,000 board members, including the YEDF board, on the guidelines, the fund's managers blatantly ignored National Treasury Circular No:12 and the agency's regulations on procedure to invest surplus funds in commercial banks and financial institutions.

But PIC chairman Aden Keynan (Eldas) took on the former council members, accusing them of sleeping on the job when public funds were being looted.

The two found themselves on the receiving end when they failed to convince the MPs that they took immediate action to avert further loss last year under the watch of former Devolution and Planning CS Anne Waiguru and Planning Principal Secretary Peter Mangiti.

Legislators Chris Wamalwa (Kiminini), Mithika Linturi (Igembe South), Sammy Mwaita (Baringo Central) and Thomas Mwadegu (Wundanyi) reprimanded the council for failing to execute its duties properly, questioning why it had not sought assistance from other organs to rein in errant boards.