alexa NYS reels under a fresh Sh10bn theft scandal - Daily Nation

NYS reels under a fresh Sh10bn theft scandal

Sunday May 13 2018

NYS buses.

NYS buses at Dedan Kimathi University in Nyeri during a past event. Sources say the new scandal may have been made possible after the government failed to get rid of middle-level civil servants when it made changes in the ministry of Youth and the NYS in 2015. PHOTO | FILE | NATION MEDIA GROUP 

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The National Youth Service (NYS) has been hit by a new Sh10.5 billion scandal, dealing a fresh blow to President Uhuru Kenyatta’s fight against corruption.

The money was allegedly siphoned from the institution in the last three years, according to multiple sources, in a well-orchestrated scheme involving senior government officials and ghost suppliers.

The Directorate of Criminal Investigations (DCI) instituted investigations late last year and its findings reveal a trail of plundering of hard-earned taxpayers’ money.

The Director of Public Prosecutions, Mr Noordin Haji, on Saturday confirmed that his office was engaged in the NYS issue and investigations were ongoing.

“The matter involves many people, some of them very senior. We’re part of a multi-agency team,” he said.

Mr Haji said the theft involved payment of pending bills, adding that his main mandate was to ensure that the law is applied properly to seal any loopholes in investigations and possible prosecution.



“We have a new way of working on corruption cases to ensure that all gaps are sealed before we move to court, including holding pre-trial conferences,” the DPP said.

Sources told the Nation that as many as 41 people, whom the DCI has said should be held criminally responsible for the systematic looting, face arrest.

Among those said to have recorded statements is a senior ministry official as well as a top man at the NYS headquarters.

NYS Director-General Richard Ndubai confirmed that detectives have been interrogating some of his staff in recent weeks.

“It is true CID camped here (NYS Thika road headquarters); they have been investigating, but I can’t tell what exactly it is, but they took vouchers from 2011 to last month,” he said.

On double payments, he said: “I don’t know about Ifmis (Integrated Financial Management Information System). I do not deal with it.”

However, he wondered how Sh10 billion could be siphoned out without raising a red flag.


Ms Sicily Kariuki was the Cabinet Secretary in charge of Youth Affairs while Ms Lillian Omollo was the Principal Secretary from November 2015 when Ms Anne Waiguru (then the CS) stepped down following pressure over that year’s NYS scandal.

Ms Kariuki was moved to the Health ministry when President Kenyatta named his second term Cabinet this year while Ms Omollo remained in her old docket.

Ms Margaret Kobia is the new CS in charge of Youth Affairs. Ms Kobia did not respond to our inquiries.

According to our sources, the new scandal may have been made possible after the government failed to get rid of middle-level civil servants when it made changes in the ministry of Youth and the NYS in 2015.

The plundering of NYS money involved paying ghost suppliers at the expense of genuine ones and also ghost suppliers getting double payments using the Ifmis.

The revelations pose a stern test to new DCI boss George Kinoti and Mr Haji after their predecessors failed to secure convictions over the previous Sh791 million NYS scandal.


According to some of the suppliers who requested anonymity to safeguard their relations with NYS, the ground work for the current mess started when NYS was expanded in 2013 and got involved in multiple projects across the country.

Since the top management was under pressure to complete many projects including the Nairobi slums upgrade, procurement processes were sidestepped and merchants were asked to supply goods within a short time.

Suppliers were promised that paperwork would be done later. Once goods were supplied, a merchant was only left with a delivery note showing they had indeed delivered supplies.

The cat and mouse chase so that the process would be documented would then start. When the previous NYS scandal hit the news in 2015, most of the merchants who had done genuine work had not been paid. Unscrupulous middle-level NYS officials then ensured new companies laid claim to the supplied goods and got paid, leaving out genuine suppliers holding delivery notes.


In the past three weeks, as the enormity of investigations by the DCI fell on NYS officials, genuine suppliers started receiving letters explaining why they had not been paid.

Some of the letters seen by the Nation show NYS explaining why a particular LPO was not paid because, for example, it did not have a certain signature, or because there were no minutes to approve payment. Curiously, no letter has been written denying that a supplier did deliver goods.

But the most blatant siphoning of money is at Ifmis level where a company would receive an amount due to it twice within a span of minutes. Ifmis is a system of payments operated from the Treasury.

If Mr Haji approves the prosecution of those already recommended by Mr Kinoti, the two will be under pressure to deliver where their predecessors, Mr Keriako Tobiko and Mr Ndegwa Muhoro respectively failed.

In March, after three years of trial, a Nairobi court acquitted former Devolution PS Peter Mangiti and 23 others accused of conspiracy to steal from the NYS.

Also acquitted of charges of conspiracy to commit economic crimes were Mr Hassan Noor Hassan, Mr Adan Gedow Harakhe and others who had been accused of unlawful disposal of public funds.


Chief Magistrate Kennedy Bidali, while acquitting them, said the prosecution failed to table sufficient evidence to prove that, indeed, there was conspiracy to commit a crime. The court further said the witnesses who testified exonerated the accused persons instead of implicating them.

The casualties of the 2015 scandal included current Kirinyaga governor, Ms Waiguru, and the then head of NYS Dr Nelson Githinji.

The latest scandal comes months after the President made sweeping changes at investigations and prosecution departments of the government.

Also, the revelations come days after President Kenyatta, yet again, talked tough on corruption.

Addressing the 8th Presidential Round Table Forum at State House, which brings together government and partners from the private sector under the umbrella of the Kenya Private Sector Alliance on Thursday, President Kenyatta spoke strongly against corruption, saying the vice had the potential to undermine his Big Four agenda and destroy the country.


“We must address the real elephant in the room. We must say enough is enough for the country to move forward,” said the President.

The President called for a multi-sectoral approach to deal with corruption incorporating the private and public sectors as well as the Judiciary and the Legislature. “I have had an opportunity to work with wonderful and dedicated men and women full of integrity. But some are not prepared to change,” he said.

The another NYS scandal dominated much of Jubilee’s first term and the government will be hard pressed to ensure there are convictions this time around.