How taxpayers lost billions to public officials, politicians

Auditor-General Edward Ouko during a past appearance before the Budget and Finance Committee of Parliament. Photo/FILE 

By GEOFFREY IRUNGU,

In Summary

• Up to Sh2.1bn may have been lost after it was advanced to senior public officials in the form of imprests but no paper trail left to confirm its use.
• Edward Ouko, the Auditor-General, says a large chunk of the money was lost in unauthorised cash handouts and in projects that did not have parliamentary approval.
• Audit report says most of the imprests appeared to have been diverted to personal use, pointing to gross misuse of funds in government.

Kenyan taxpayers lost more than Sh2 billion in irregular payments to politicians and senior civil servants in the past financial year, a new report by the Auditor-General indicates.

The report, which was tabled in Parliament on Tuesday, shows that up to Sh2.1 billion may have been lost after it was advanced to senior public officials in the form of imprests but no paper trail left to confirm its use.

Edward Ouko, the Auditor-General, says a large chunk of the money was lost in unauthorised cash handouts and in projects that did not have parliamentary approval.

“The audit of imprests across ministries revealed major weaknesses that resulted in long outstanding imprests not cleared,” the report says, adding that some of the officials who took imprests have since died, left service or retired.

Mr Ouko says a large segment of the expenditure lacks supporting documentation, making it difficult to identify the holders of the balances.  

Imprest is money that is advanced to public officials for use in official functions and documents supporting the expenditure surrendered to the accounting officers.

T
he audit report says most of the imprests appeared to have been diverted to personal use, pointing to gross misuse of funds in government.

Mr Ouko’s findings on imprest add to the puzzle of Sh304 billion that government departments failed to account for in the year under review.

(READ: Audit shock at Sh304 billion that cannot be explained)

The Ministry of Agriculture tops the list of irregular users of imprest cash, having failed to account for Sh773 million. It is followed by the Ministry of Finance (now the National Treasury) with Sh490 million and Public Works with Sh224 million in disbursed allowances that are not accounted for.

Pending bills or expenditure that has not been authorised by Parliament also rose to a massive Sh4.5 billion in the year to June 2012, leaving the Treasury with the task of regularising the payments.

No documents

Though it is recognised that situations may arise that necessitate such expenditure, the audit report says most departments that spent such money had no documents to show for it.

Analysts said the persistence of and a deepening of the pending bills problem nearly four years after the government introduced a new law to resolve it reveals the extent to which systemic theft of public funds is rooted in public service. 

The Ministry of Provincial Administration and Internal Security (now Interior) topped the list of departments with the highest pending bills, having spent Sh1.6 billion that is yet to be paid followed by the Ministry of Public Works with Sh960 million and Medical Services with Sh279 million.