Has someone been fleecing the Treasury of cash collected in tax?
Two years ago, there was a public uproar when Mr Mwalimu Mati’s Mars Group blew the whistle over the Sh9.2 billion errors his group had uncovered in the accounts and budget documents.
It was a very grave matter because what the Mars Group announced cast aspersions on the credibility of the figures in government accounts, implying that Treasury had presented cooked books in Parliament.
The initial reaction by the Treasury was to trash the findings as inaccurate and dismissing Mars Group as a mere busybody with neither the capacity nor expertise to question Treasury’s work.
But as it turned out, it was Mr Mati and his group who had the last laugh; Finance minister Uhuru Kenyatta was forced to eat humble pie and admit that those grotesque errors existed in the books he had tabled in April 2009.
The irony of it all was that Uhuru did not stop at merely affirming the errors. He came up with even bigger errors.
The Mars Group are up to even more mischief. This time around, they have painstakingly read through reports of the Controller and Auditor-General for the last two years to study and analyse the comments the Auditor-General has been making on the state of revenues and taxes which the government collects.
I had the chance to peruse through the latest delivery by the Group. The disclosures are absolutely sensational, to say the least.
It is a must reading for anyone interested in following how the government accounts for the revenue it receives from the Kenya Revenue Authority or any other sources.
Away from the limelight, the Controller and Auditor-General has been qualifying several revenue accounts, and flatly refusing to issue certificates to the Treasury.
Here is a bit of background. Every year, the Treasury presents the Controller and Auditor-General a revenue statement, disclosing details of revenues received on income tax, VAT and corporation taxes.
The accounts for all revenue categories are kept separately. The gist of the new report by Mars Group is that the Auditor has discovered several cases where records of revenues received by KRA does not tally with what was actually received by the Treasury.
There are also cases where accounts of revenues banked at the Central Bank differ from the records kept by the receiver of revenues.
Where there are material differences, what the Auditor-General has been doing has been to exclude such revenue categories from the general certificate issued to the Treasury at the end of the year.
Is it just a matter of sloppy accounting? We all know that accounts which cannot reconcile are a recipe for irregular dealings.
As it is, the evidence in the reports suggests that unscrupulous individuals working in the revenue departments may be colluding to siphon off money between the time the revenues reach the Kenya Revenue Authority and the time the money hits the Exchequer account at the Treasury.
Whichever way you look at it, what the Mars Group has revealed is a total outrage. Imagine a situation where an external auditor declines to issue certificates on revenue accounts of a company.
Yet the report by the Group shows that in 2008, the Auditor-General excluded several statements from the general certificate it issued to Treasury.
In the year ending June 2009, the Auditor-General issued a certificate to only one revenue statement out of more than 10 such accounts. The revenues the Auditor is unable to reconcile runs into hundreds of billions of shillings.
The Public Accounts Committee should move quickly and pressure the Treasury to explain what it is unable to reconcile in its statements of revenues.
But even if MPs decide to look the other way, Treasury must brace itself for increased public scrutiny on its revenue accounts.
Increasingly, citizens are organising themselves into associations that are ready to bring the government to account on how it spends public taxes.
From residents associations and business lobbies, we are back to the world of taxpayer associations agitating for change.
It is one thing for the government to be accused of spending money irregularly, and it is another to be accused of messing up with revenues.
