Edward Ouko reveals govt failed to account for Sh7.3bn

Up to Sh14.4 billion was spent by the government on projects that had no value for money during the 2014/2015 financial year, the auditor-general says.

Another Sh7.3 billion cannot be accounted for, Mr Edward Ouko said in his report for the 2014/2015 financial year tabled in Parliament Thursday.

“With no value in return, the expenditure of Sh14,449,695,088 is deemed to have been wasted. Much of the wastage occurred in the course of procurement,” he says in the report.

This was a departure from the past where he confined his observations to expenditure that raised audit queries.

Topping the list of ministries, departments and commissions that “wasted” public funds are the Interior ministry (Sh4.6 billion), Agriculture (Sh2 billion), electoral commission (Sh1.9 billion), education (Sh1.3 billion), and defence (Sh1.1 billion).

Others are Foreign Affairs (Sh650 million), Labour (Sh480 million), Industrialisation (Sh435 million), the Treasury (Sh400 million), Planning (Sh273 million), Mining (Sh102 million) and the Presidency (Sh88 million).

The report says various ministries, departments and commissions could not produce documents to support expenditure of Sh7.3 billion, raising fears the cash might have been used unlawfully or ineffectively.

Topping the list is the Agriculture ministry, which cannot account for Sh2.4 billion, followed by the planning department under the then Ministry of Devolution and Planning, which cannot account for Sh2.1 billion.

Other ministries and departments that failed to account for funds include the stores and service fund, which could not explain a Sh1.3 billion expenditure, health (Sh402 million), sports (Sh234 million), East Africa Community Affairs (Sh57 million) and police service commission (Sh54 million).

“In 2014/2015, a number of ministries, departments, commissions and funds failed to provide documents supporting expenditure totalling Sh7,321,277,260, which was a significant improvement to the previous year where Sh66,782,697,987 was unsupported,” the report says.

INCREASE IN DEBT
The report further notes that ministries, departments and commissions had pending bills of Sh43.2 billion, which could explain the cash crunch experienced during the 2015/2016 financial year.

The auditor-general also notes that the government did not remit Sh3.1 billion to the Exchequer during the financial year, which is against the law.

Revenue statements show that a total of Sh1 trillion was collected during the financial year.

The statements show that the balance brought forward from 2013/2014 amounted to Sh3.3 billion, bringing total revenue available in 2014/2015 to Sh1 trillion.

“The revenue statements, however, reflect an amount of Sh1,085,086,342,222 as having been paid to the Exchequer during the year, leaving a substantial balance of Sh3,153,511,288 not remitted as at 30 June 2015.”

On the controversial Eurobond, the report says of the total $2 billion, $1.9 billion was received on June 24, 2014 and deposited in an offshore account in contravention of the law, which stipulates that all money raised or received by the National Government be paid into the Consolidated Fund.

The public debt, according to the auditor-general has risen from Sh1.3 trillion in 2010/2011 to Sh2.6 trillion in the 2014/2015, an increase of Sh1.2 trillion in five years.

It attributes the astronomical growth to new loans by development partners.