Chief auditor on the spot over NYS scam

Tuesday July 12 2016

A senior auditor in the Devolution ministry was on Tuesday taken to task by MPs for failure to flag the theft of more than Sh1.6 billion at the National Youth Service (NYS).

The head of internal audit at the ministry, Mr Alex Ngugi, who is still in office despite the suspension of a junior fellow, who is facing corruption charges, came into the firing line of the Public Accounts Committee, when he admitted he did not order a report from the officer when the scandal came to light last year.

The amount of money in the scandal, which was initially reported to be Sh791 million, shot up to Sh1.6 billion after it emerged the Ethics and Anti-Corruption Commission was investigating 15 additional companies over payments amounting to Sh869 million.

“When I learnt about the scandal, I telephoned the officer in charge of audit at the NYS and he came to my office and gave me a brief. I did not formally write a report on what had transpired,” he told the committee.

The audit unit at the agency is one of the seven directorates that were under former Devolution Cabinet Secretary Anne Waiguru. Ms Waiguru was also forced to resign and has been grilled by investigators over the matter.

Suba MP John Mbadi asked Mr Ngugi to justify why he should continue being on the payroll of taxpayers.


The official had earlier told the committee that he was involved in developing the annual work plan, and it is up to auditors-in-charge under him, to implement it to the letter. But, he baffled the lawmakers when he said he was not aware of the massive financial transactions as hundreds of millions of shillings were paid to suppliers in the making of one of the biggest scandals under the new national leadership.

(READ: Firm wanted more money from NYS, PS reveals)

According to the senior auditor, the management of the agency had requested pre-auditing of its transactions to “improve management”, which was made verbally, and he agreed to the request informally as well.

However, senior managers at the agency, whom he did not name, wrote a letter to him asking that the process be stopped, after which he had a “bitter exchange” with them through a flurry of letters, although he could not provide the correspondence.

Committee vice-chairman Jackson Rop (Kipkelion West MP), said that by agreeing to be embedded in the agency’s approval process, Mr Ngugi had a measure of responsibility over the transactions.

Balambala MP Abdikadir Aden dismissed claims by Mr Ngugi that he was not aware of the huge payments, saying as the head of audit he should have been privy to these.

The official also said he had seen the special audit by the Auditor-General on the scandal a day before appearing before the team.