Nacada boss and agency’s officials embroiled in a war of attrition

Nacada is engulfed in a war of attrition pitting its chairman, Mr John Mututho, against top officials that has sucked in the National Treasury and the Interior ministry.

Documents seen by the Sunday Nation show that Treasury Principal Secretary Kamau Thugge and his Interior counterpart Mutea Iringo have in the past two months been forced to intervene against Mr Mututho’s supposed attempts to interfere with an ongoing audit and turn down his wide-ranging demands, including asking for office space, security, iPads, luxury vehicles and medical insurance for board members and their families.

Top Nacada officials have also questioned Mr Mututho’s conduct with some saying he is overstepping his mandate as chairman by taking over the functions of senior managers.

Mr Mututho, a former MP for Naivasha, was first appointed Nacada chairman by President Uhuru Kenyatta in October last year through a Gazette notice but this was revoked in November after State House realised Parliament had to vet the Nacada chairman.

Mr Mututho, a passionate campaigner against irresponsible drinking, eventually went through the parliamentary process despite some opposition linked to his ongoing fraud case.

Mr Mututho has a case in court where he is accused of defrauding Kenyatta National Hospital of Sh41.2 million in tax when he imported bedside cabinets for the referral hospital. Mr Mututho has denied the charges in the case which has dragged on for the last 12 years.

After Mr Mututho’s appointment, the Nacada board led by CEO William Okedi agreed to audit the Alcoholic Drinks Control Fund. This was after Mr Mututho claimed that Sh400 million had been embezzled from the fund.

However, the audit ran into a rough patch after Mr Mututho allegedly attempted to interfere with the process and claimed that a Nacada senior officer had bribed auditors.

According to a letter to Internal Auditor-General at the Treasury, the lead auditor, Mr SM Mwangi, claims that he met Mr Mututho in a parking lot of a hotel after being lured by another board member, Mr Fazul Mohamed, who is the chairman of audit on the board.

“On January 3, 2014, the chairman of the audit committee and I met as earlier agreed and apparently at the parking lot of the hotel premises we met the chairman of the board (Mr Mututho) which to me was a surprise. I was meant to understand that it was just a coincidence,” says Mr Mwangi.

The letter further states that during the meeting, Mr Mututho “was categorical about the same sentiments carried in the newspaper (that Sh400 million was lost) which was indeed outside the scope and TORs (terms of reference). I expressed the need to conduct the audit in an objective manner guided by the TORs who indeed are not targeting auditing the headquarters accounts”.

On Saturday, Mr Mututho confirmed that he met the lead auditor and Mr Fazul. However, he claimed he only bought them lunch.

“They met me and I bought them lunch because I know them. I was happy that Mr Fazul had met the auditors who were our clients. In fact, they should refund the money I spent on them for lunch since they have now made the meeting public,” says Mr Mututho.

Mr Mututho insisted that the auditors were bribed by senior managers at Nacada, something the agency’s officials have disputed in a letter to the Treasury and recommended that the audit be stopped until Mr Mututho’s claims are investigated.

Mr Mututho also claims that senior Nacada managers came back to the office from leave to shred documents, an allegation discounted by senior officials who spoke to the Sunday Nation on condition of anonymity.

However, Mr Mututho insists there has been impropriety: “I am new at Nacada. My work entails campaigns. I do not handle books or audit or money. I have nothing to be audited. The truth of the matter is that I have credible info (information) that some of them (auditors) got a million shillings. If need be, I will shout about this from the top of KICC,” says Mututho.

The exchange of letters between the lead auditor and the Nacada board led to a joint meeting between the acting Internal Auditor-General, the Treasury and Nacada board on January 9, 2014.

According to resolutions of the special board meeting seen by the Sunday Nation, the board asked Mr Mohamed, Ms Anne Mugo (National Treasury), Mr Stanley Kamande (Interior ministry) and Nacada management led by Mr Okedi to meet the auditors to jump-start the audit.
The board also resolved that the auditors should only communicate with Mr Mututho on audit matters.

“Audit is a board function and, therefore, all communication regarding the audit is channelled through the board chairman to communicate this resolution to the Internal Auditor-General, board and management,” states the resolution.

However, in a terse letter to Mr Okedi, National Treasury Principal Secretary Kamau Thugge asked Nacada board to provide “tangible and concrete” evidence to substantiate claims that the auditors were bribed.

Mr Thugge also told the board to review its decision that allows Mr Mututho to be the only link between the agency and the auditors. He directed that the board “… re-looks at the request by the chairman through its letter dated January 9, 2014 that all communication regarding the ongoing audit be channelled to him in the context of good corporate governance principles and separation of checks and balances,” says Mr Thugge in a letter dated January 10, 2014.

Prior to the differences between Mr Mututho and Nacada management, the chairman had asked for office space, security personnel for his residence, a driver, a Mercedes Benz for town trips and a Prado for field visits to be assigned to him full-time.

He also wanted sitting allowances for board members raised from Sh20,000 to Sh50,000, enhanced medical covers for their wives and children and iPads.

Mr Mututho also sought to be allowed to determine board meetings for operational activities.

The requests were forwarded to the Interior Principal Secretary who did not approve them.

“I have noted the contents of the referenced letter and hereby advise that you adhere to the guidelines as contained in various legislations and circulars as has been indicated,” wrote PS Iringo to Nacada CEO Dr William Okedi. The letter is copied to Interior Cabinet Secretary Joseph ole Lenku.

Speaking to Sunday Nation, Mr Mututho dismissed claims that he was demanding things outside government regulations.

“You people should appreciate Mututho for what he has done. I am not a poor man. I do not want an iPad but a laptop which is a working tool. I have no intention of going home with it. I will leave it with them when I get fired,” said the Nacada chairman, who pushed for the Alcoholic Drinks Control Act, known as the “Mututho law”.

Mr Mututho says that asking for a Prado for use in field events was not too much.

“Look my friend, I was among the first Kenyans to import a Mercedes Benz S600 in 2006, what is a Prado? These people should tell Kenyans why they have not tested alcoholic drinks. Out of 500 drink brands in Kenya, only 24 pass the test. Tell me whether they are doing their job,” says Mr Mututho.

When contacted, Mr Okedi, the Nacada CEO, declined to comment and referred us to Mr Iringo and Mr Mututho.

Since his appointment, Mr Mututho has faced criticism for suggesting that people would be required to seek licences to drink in their houses. He, however, clarified that this only applied to those who intended to have alcohol at home.

Last month he also led a raid on a strip club in Eldoret. This week, he also floated the idea of temporarily banning nightclubs in Nairobi.

However, some have praised Mr Mututho for his efforts to regulate the drinking of alcohol.