Supplies Branch, Ifmis hold the key to grand theft at NYS - Daily Nation

Supplies Branch, Ifmis hold the key to grand theft at NYS

Wednesday May 23 2018

National Youth Service

National Youth Service (NYS) men and women during a graduation parade in Gilgil, in February. Another scandal, in which Sh9 billion was lost, has been unearthed in the department. PHOTO | FILE | NATION MEDIA GROUP 

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Perhaps the most significant revelation from the investigations into the National Youth Service scandal is the extent to which a clique of corrupt elites had captured the financial operations of this critical national institution for seven years.

The public resources at risk and the amounts stolen are simply staggering.

The revelations offer a sensational tale about how an organised group of corrupt bureaucrats weaved complex schemes to fleece NYS of billions of shillings.

Is it not the height of irony that, even after the first NYS heist of 2016, which precipitated the exit from office of then-Devolution Cabinet Secretary (now Governor) Anne Waiguru, these greedy networks had the audacity to continue with their game of siphoning money from public coffers as if the Sh791 million scandal had not happened?


I think there is a major political sub-text to the ongoing NYS investigations.

First, we all know that, going by the amounts involved and level of impunity displayed, what we have seen is only possible in a political environment where corrupt networks are not only sufficiently organised and co-ordinated but also enjoy protection from high offices.

It is clear that the corruption games at the NYS are perpetrated in an interlocked system, where elites from across all factions expect to get their share of the loot. That is why it is rare for corruption investigations of such a scope as the NYS one to attract much political support.

The standard response by incumbents is to close ranks and resort to the ignoble expedience of blaming any criticism on political enemies.

Whenever corruption allegations appear in the media, the incumbent elites impulsively default to funny tricks to minimise public outrage around the scandal. They denigrate the critics who will be pointing an accusing finger at the government for the scandal.


Curiously, this has not happened in the current probe. Instead, the administration appears to be approaching the investigation with a rare resolve to punish perpetrators.

Clearly, the political cover for the corruption networks has been disrupted. Depending on how the investigations pan out, the circumstances may foment major political ramifications.

Still, I will hold that any serious detective investigating the NYS scandal must concentrate on two areas: Ifmis and that department in the Ministry of Lands and Housing known as Supplies Branch.

Nearly all of the fake contracts which were used in the NYS scam purported to have emanated from Supplies Branch. And we have seen how crooked public officials with high-level Ifmis access rights would insert fake Supplies Branch contracts into the system in order to perpetrate the grand theft at NYS.


We have seen how public officials with powerful access rights in Ifmis were able to corruptly force local purchase orders (LPOs) into the system, corruptly create goods received notes, corruptly process invoices and, finally, corruptly process what ICT wonks call ‘flag to pay’.

Public Service Cabinet Secretary Margaret Kobia may very well have good reasons and intentions for sending staffers from the ranks of the NYS on compulsory leave. But if you don’t tackle Ifmis and Supplies Branch, you are going nowhere.

This time around, I expect the investigators to give us names of the perpetrators — not mere fronts.

How do you pay a company with limited or no trading activity hundreds of millions of shillings without asking questions?

The NYS scandal is a statement of the poor standards of suspicious transaction reporting by our Financial Reporting Centre. Companies were opening new banks accounts two or three months prior to receipt of government cheques. Do these companies pay taxes?


The investigators must also show us how the money moved, weave the spectre of laundering and explain how some of the money looted from the NYS ended up in banks in Dubai and Qatar.

Before 2014, all NYS field units operated in a semi-autonomous manner, with each field office head having authority to incur expenditure and to procure.

It seems that the rain started beating us in 2015, when a decision was made to procure everything from headquarters. This is how we ended up with the high-value contracts the scammer wanted.

It is during that period that the development vote increased ten-fold within two financial years. Also, the NYS fraudulently paid Sh791 million to some three suppliers who had been introduced into its Ifmis site details from a remote location far away from its Ruaraka headquarters.

In the name of youth empowerment, scammers created loopholes that they used to loot billions of shillings from the taxpayer. The dragnet for catching the looters must be cast wide.