Former Kiambu governor William Kabogo’s Sh250 million Biashara Fund is at the centre of a raging controversy over alleged embezzlement of funds.
Auditor General Edward Ouko, in a damning report covering operations of the kitty as at July 2017, highlighted massive irregularities in Mr Kabogo's pet project that has been heavily defaulted.
Unpaid loans as at May 2 and according county records include Sh47.9 million disbursed through Rafiki bank, KCB Mobiloans (Sh9.8 million), Vision Empowerment Sacco (Sh9.4 million), Kiambu County Women Sacco (Sh7.3 million), Kiambu County Women Rural Sacco (Sh6.4 million) and KCB (Sh879,343).
UNDISCLOSED BANK ACCOUNTS
According to the auditor’s report dated March 15, some of the issues flagged include undisclosed bank accounts, suspect bank balances and statements, stale cheques, unsustainability and non-payment.
As at June 30, 2017, the fund, which was being run through Rafiki Bank and Family Bank, had a bank balance of close to Sh76 million at Rafiki Bank and Sh3.7 million at Family Bank.
However, a review of the cash books in the two accounts reflected a balance of Sh7.9 million at Rafiki Bank and Sh1.4 million at Family Bank and the auditors could not ascertain the “accuracy and validity” of the Sh76 million figure.
They also found “doubtful reconciled items” saying that, though financial statements showed an estimated Sh76 million balance, a review on Family Bank’s cash book revealed unsupported reconciling receipts of Sh26 million as at May 9, 2016, Sh660, 000 as at June 9, and Sh26.8 million as at June 23, which were not in the bank statements.
Further, the auditor said that, after examining the bank reconciliation in respect of Rafiki Bank account for the month of June 2017, there were stale cheques worth Sh226.7 million, which dated back to November 2015 but had not been replaced.
Further, included in the list of unpresented cheques was a Sh11.6 million cheque dated November 19, 2015 for a transfer of funds to Family Bank but which was cancelled.
However, the cancelled cheque was replaced with another one dated the same day and was cleared by the bank on the same day and according to the auditors, it was not clear why the cheque was not presented leading to erroneous balances.