Confusion hits Treasury over new ‘errors’

The Treasury has been thrown into a spin weeks before the Budget presentation as officials are forced to defend themselves against persistent accusations of introducing errors. The confusion came as IMF officials were expected in Nairobi on Tuesday to start the country review.

Some officials are having to work overnight even as they have to take time off to respond to claims of deliberately introducing errors in their reports. And in another development, detectives investigating how mistakes were introduced into the Supplementary Budget — brought to Parliament by Deputy PM and Finance minister Uhuru Kenyatta before being withdrawn — have discovered that a Treasury official knew about the errors but did not alert his bosses.

However, top Treasury officials last evening maintained that the Supplementary Budget figures were correct and accused the Mars Group of using the withdrawn erroneous figures to make in their calculations. They said that the Appropriation Bill figures passed in Parliament went unchanged because the Sh10.7 billion errors were confined to historical figures, which were not supposed to be debated or changed.

However, as we went to Press, Nation auditors going through estimates lines by line to determine whether there were discrepancies as alleged by Mars Kenya. A comparison by Nation Media Group internal auditors did not find any discrepancies in the stated reduction of Sh27.3 billion as contained in the Supplementary estimates. The Mars group had reported a Sh72 million discrepancy in the figures.

Mars Group officials had also reported a Sh163 million discrepancy in the approved budget line item but the Nation’s internal auditors found that the figures tallied. According to Nation auditors, their figures agree with supplementary tables presented by Mr Kenyatta, contrary to the claims raised by the Mars Group.

But the Nation audit is incomplete because it has taken into account only the summary totals and not the individual line items. Mars Group recently scored a major point after identifying distortions in supplementary spending figures passed by MPs. Parliament later cleared Treasury officials over intent to defraud after carrying out tests with the help of the National Audit Office.

“There is nothing wrong with our figures. That is our position,” said a key official. who refused to be named because of the political overtones the matter has assumed. He also said that the International Monetary Fund had carried out an audit of the numbers after the matter was raised in Parliament, on orders from Washington, and had given the figures a clean bill of health.

IMF officials checked the figures before they were presented in Parliament for a second time, he claimed. Treasury has since contacted the Fund to request further assistance to make the system foolproof. They are still convinced that there was internal sabotage in the earlier affair.

However, officials at the Treasury are rankled by allegations that there was conspiracy to defraud the government given that any withdrawals have to be against parliamentary approval and after confirmation by the National Audit Office and the Accountant-General’s office.

The last time that is said to have happened was during the Goldenberg scandal during which Sh5.8 billion was removed from the Consolidated Fund allegedly on the authority of the then Finance permanent secretary. Investigation by the CID and the NSIS are focusing on possible tampering with the figures.

Some Treasury sources said the whole Budget department had been interviewed although the investigators were under instruction to go slowly on the matter so as not to disrupt the current Budget-making process, which is expected culminate in the Budget speech in about two weeks. Others grilled are from the State computing department and the Government Information and Technical Services.

Police sources on Tuesday said detectives from CID headquarters had finalised investigations into the initial error. However, going by the Treasury’s stand, they are unlikely to investigate the claims by Mars Group lobby. The team from the Economic and Commercial Crimes Unit began the investigations on May 12 after they were asked to do so by Finance permanent secretary Joseph Kinyua.

They were asked to establish whether there was criminal intent in the error detected in the first supplementary bill presented in Parliament. The investigating team led by Mr James Muinde has questioned at least eight senior Treasury officials. The team is expected to hand over its report to the Commissioner of Police, Major General Mohammed Hussein Ali.

However, when contacted to establish on the investigations, Mr Muinde referred the Nation to the Director of CID Mr Gatiba Karanja who was said to be in a meeting on Tuesday. The detectives were to find out if there was a criminal intent in the introduction of new budget lines and who introduced them. Emphasis was put on all those who drafted the supplementary budget and might have introduced the “errors”.

The police detectives have found out that some figures were wrong. Others were omitted and others were mixed up. A source said people interviewed were insisting that they were just mistakes therefore what the detectives are trying to find out is whether they amounted to ordinary errors or sabotage.