Sh1 billion for youth enterprises spent on salaries, says Gathungu

Auditor General Nancy Gathungu. PHOTO | LUCY WANJIRU | NMG

Auditor-General Nancy Gathungu has said Sh1 billion from the Youth Enterprise Development Fund meant to give loans to the youth has been utilised to pay staff salaries, perks and travel.

In a report tabled in Parliament, Ms Gathungu said the move casts doubt on the ability of the fund to provide loans to young people intending to start their own business.

In addition, the Auditor General in her report for the financial year ended June 2019 says the utilisation of the Sh1 billion for recurrent expenditures will affect the sustainability of the fund.

“This implies that the fund management has over time utilised Sh1,093, 839,342 of the revolving fund to recurrent operations expenditure thereby affecting the sustainability of the fund. Further, no reallocation approvals were availed for audit verification to support utilization of conditional grants on recurrent expenditure. Under the current circumstances, sustainability of the revolving is at risk and therefore and doubtful,” reads the reports.

Ms Gathungu says in her report that the funds’ woes is further compounded by the fact that it has in the last four years continue to incur deficits in its financial performance.

“The trend of the fund continuing to incur deficits as has occurred over the last four years may erode the capital invested in the revolving fund and impair the ability of the fund to sustain its core duty and services as intended in its formations,” Ms Gathungu says in the report.

“This material uncertainty which casts significant doubt on the continued ability of the fund to discharge its mandate in the foreseeable future has not been disclosed in the financial statements,” reads the audit report.

The Auditor General has also questioned payment of Sh739,726 to an officer at the fund for 45 days leave commutation. The officer has not been mentioned in the audit report.

Ms Gathungu said the leave commutation of the officer was not approved by the immediate supervisor.