Revealed: How Devolution ministry tried to change details in Sh826m payout

Fresh details have emerged on how the Devolution ministry attempted to arm-twist Treasury officials to alter details of the controversial Sh826 million National Youth Service (NYS) payments in the electronic platform known as the Integrated Financial Management Information Systems (IFMIS).

Documents also show that Treasury Principal Secretary Kamau Thugge had, in a letter dated May 7, raised the red flag on the goings-on at the Devolution ministry by cautioning PS Peter Mangiti against engaging in improper financial procedures.

“We wish to reiterate that it is a violation of the Public Finance Management Act, which states that it is an offence of financial misconduct if, without lawful authority, an officer incurs expenditure or makes a commitment on behalf of the government or entity since this results in pending bills,” Dr Thugge wrote.

According to documents seen by the Sunday Nation, just before the issue spilled over to the public, NYS deputy director Adan Gedow Harakhe tried to work backwards to correct the situation by calling on IFMIS director Jerome Ochieng to open up the accounting system to delete the payments.

“The purpose of this letter is to request that various Local Purchase and Service Orders be reversed and be decommitted from the system. The officer from NYS who will execute this task is Ms Leah Guchuka,” wrote Mr Harakhe in a letter dated May 27.

Mr Harakhe argued that because his password had allegedly been stolen by unknown people, the payments should be deleted from the system in which funds are allocated for specific jobs undertaken by ministries to avoid pending bills. Opening the system would have freed the funds for NYS to use as it wished, contrary to the rules.

An official from the Treasury, who spoke in confidence, said that making changes on IFMIS entries without written authority from Treasury Secretary Henry Rotich acting on written instructions from the PS or Cabinet secretary of the concerned ministry would lead to a full-blown investigation by Ethics and Anti-Corruption Commission.

IFMIS was introduced to ensure transparency and accountability in procurement and payment in government.

SOURCE OF TENSION

On Thursday, Devolution CS Anne Waiguru said she had written to the Directorate of Criminal Investigations over attempts to steal Sh826 million from NYS. The appointment of Mr Harakhe to deputise NYS director-general Nelson Githinji has also been seen as a source of tension, something Ms Waiguru has denied.

Before the issue became public, Mr Harakhe had hit the panic button after an NYS officer (name withheld) who initiated the payments process in IFMIS to clear some bills in NYS pronects in Nairobi’s Kibera and Mukuru settlements declined to alter the documents, saying it would be tantamount to interfering with police investigations.

The NYS has three IFMIS accounts: consultancies, food and civil works. The contentious funds had been committed for civil works projects.

Funds in each account must be used for a specific job allocated. NYS had encroached on the civil works account to pay other bills after exhausting funds in food and consultancy accounts.

The Treasury officials are said to have rejected Mr Harakhe’s request and asked for a letter from PS Mangiti, who is yet to commit himself on the issue a month later. 

On Saturday, Ms Waiguru took to social media to circulate documents showing that she informed the Directorate of Criminal Investigations (DCI) on June 5, more than a month after the incident. This was seen as an attempt to counter criticism on social media.

“I contacted the CID when Adan Harakhe informed me that his password had been stolen and money committed to NYS IFMIS,” Ms Waiguru said via her Twitter account.

In one of the letters, she asked DCI boss Ndegwa Muhoro to call in the Cybercrime Unit.

“This matter is of grave concern to me as the minister in charge. I am, therefore, requesting you to instruct the Cybercrime Unit to undertake urgent and thorough investigations to establish the exact happenings and extent of the activities,” wrote Ms Waiguru.

IN A HURRY

On Thursday, she held a press conference defending various payments, including to Mr Mutahi Ngunyi’s Consulting House, Transcend Media Group, Bora Global Ltd, Ms Things of Desire, and Brand Associates.

Just before the reading of the Budget, the Devolution ministry seemed to be in a hurry to claim Sh5 billion from Treasury.

“The purpose of this letter is to request your office to load this approval on the following budget heads and lines in IFMIS to assist the ministry to settle the already incurred expenses and other commitments before the closure of financial year,” wrote Mr Mangiti in a letter to Dr Thugge.

Some Sh4 billion was approved before the Treasury cautioned the Devolution ministry.

During the same period, Mr Mangiti had also asked the Treasury to release Sh162 million for the Kenya Youth Empowerment Programme, an issue that raised questions since the programme was fully funded by the World Bank to the tune of Sh1.4 billion.

On Saturday, Cord leader Raila Odinga waded into the NYS scandal and called for an independent forensic audit of how the funds have been used.

“Jubilee must get to the bottom of the theft going on at the Ministry of Devolution with a thorough independent forensic audit of the NYS, including its budget, recruitment, training manual and gender, ethnic and regional composition of its recruits,” said Mr Odinga in a statement.

The Sunday Nation also established that for the past three months, youths working for the NYS project in Kibera have not been receiving regular payments.

The more than 3,000 youth who are working for the project are supposed to earn Sh470 per day with Sh140 going to their saccos. Their pay is supposed to be consolidated for six days and paid on Saturday through National Bank of Kenya to their mobile money accounts.

A Sunday Nation enquiry to the Ministry of Devolution about allegations of irregular payments and withdrawal of officers had not received a response almost one month after being made.

This comes as part of the project remains unfinished due to lack of materials despite a six-month extension heading to a close.

The government in April silently withdrew its 675 NYS officers who were supposed to supervise the youth from the slum who work for the project.

This seems to have affected work. For example, a 3.6km tarmac  road that was to be constructed between the Kibera DC’s office and Highrise Estate is yet to be completed nine months after its construction began due to lack of materials.

In addition, none of the posho mills that were to be constructed are working. President Uhuru Kenyatta, while on a tour of the slum in December last year, said the posho mills, which were to be owned by each of the 16 saccos, would sell maize flour at a subsidised price of Sh60 per 2kg.

A wi-fi project that was to provide free internet access to the residents has never been implemented. Only one of the eight police posts promised by the government is operational. Similar projects have been launched in Nairobi’s Mathare and Kisumu.