Auditor-General Edward Ouko has revealed the theft of about Sh390 million at the Tourism Fund through a phony receipt racket.
The
auditor says 17,209 receipts are missing from the agency and that the
racket has cost taxpayers Sh390.8 million through unexplained
withdrawals since 2013.
The fund collects hundreds of
millions of shillings from hotels through a catering levy, making it one
of the most lucrative State corporations under the Tourism ministry.
“There
is likelihood that revenue collected is deleted from the system and
later withdrawn in cash for unauthorised transactions and also possible
manipulation of receipt numbers,” said Mr Ouko.
“Consequently,
it is not possible to ascertain if levy income of Sh2,009,627,284 is
fairly stated,” Mr Ouko said in the Tourism Fund books of accounts for
the year ended June 30, 2016.
The fund is not fully
automated and manual entries have made it easier for its staff to siphon
cash from the agency. Mr Ouko reckons that the semi-automated operation
has created opportunities for data manipulation and making unauthorised
entries in the system.
“The system could not also
distinguish a late payment with an arrears payment as it applied
penalties to both. This meant that levy department has to call back and
confirm the payment and manually make corrections,” Mr Ouko said.
He said 30,057 transaction entries were missing during
the year under review and the agency made unexplained cash withdrawals
of over Sh152.3 million.
Data from ledgers and bank details revealed differences, which were not explained by the fund management.
Mr
Ouko said 34 M-Pesa transactions amounting to Sh199,198 in the month of
June 2016 were not posted to the M-Pesa collection account.
He said there was likelihood that the revenue collected may have been materially misstated during the year under review.
He also found out that the fund had no proper documentation for payments saying there was no issue of ETR receipts or invoices.
“As
a result of unavailability of proper documentation, it has not been
possible to confirm the propriety of payment of Sh1.2 million which are
not in compliance with Section 49 of the Value Added Tax Act and ETR
regulations,” Mr Ouko said.
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