Search for Treasury’s role in Sh9 billion theft at NYS

A team investigating suspected fraudulent payments at the National Youth Service (NYS) has shifted its attention to Treasury.

The multi-agency team based at the Directorate of Criminal Investigations (DCI) suspects that some of the fictitious transactions may have been introduced in the Integrated Financial Management System (IFMIS) at Treasury to make the claims.

Investigators want to establish if officials at Treasury who man the IFMIS may have played any role in the suspected fraud that is said to involve pending bills.

Investigations progress

Director of Criminal Investigations George Kinoti said the probe was progressing well and called for patience. “Let us be patient. Much of what is being published could be speculation, but teams are working hard to establish the truth,” said Mr Kinoti.

The multi-agency team comprises of officers from the DCI, Office of the Director of Public Prosecutions (ODPP) and the National Intelligence Service (NIS)

The investigations come after claims that part of the Sh8.8 billion paid to suppliers between 2016 and last year was fraudulent.

Already the investigating team, which has been on the matter for the past eight months, has identified several suspects they will recommend for prosecution.

“We will ask the DPP to approve charges for three categories of suspects who include government officials and suppliers,” said an insider aware of the probe.

The team is combing through all payments made to suppliers for the last six years. The claims had been reported to Parliament, DCI and EACC.

Parliament’s Public Accounts Committee yesterday said it was also conducting its own investigations and had summoned some officials.

In the 2016/2017 financial year, the State Department of Public Service and Youth Development received Sh22.2 billion, while in the 2017/2018 it got Sh17.9 billion.

Documents supplied to the investigators show that NYS suppliers were paid Sh6.2 billion in the 2016/2017 period, while Sh2.6 billion was paid in the 2017/2018 period, bringing it to Sh8.8 billion.

In the 2016/2017 period, there was Sh3.6 billion in unpayable claims. In the 2017/2018 financial year the unpayable claims amounted to Sh2.3 billion, totalling to Sh5.9 billion between 2016 and 2018.

According to documents given to the investigators, in the 2016/2017 period, there were 1,401 suppliers as opposed to 421 in the 2017/2018 period.

“Note that the number of suppliers paid refers to all claims, both pending claims from previous management and current bills accrued by the State department,” a memo given to the team reads.

For the last two years, total salaries paid to the entire department was Sh3.6 billion. Up to Sh6.5 billion was paid to NYS cohorts, Sh8.4 billion to semi autonomous Government agencies and Sh9.9 billion to other expenditures, including National Hospital Insurance Fund (NHIF) for civil servants and Huduma Secretariat.

Principal Secretary in the State Department of Public Service and Youth Development Lilian Mbogo-Omollo, NYS Director General Richard Ndubai and officials drawn from the Finance and Procurement departments have been questioned by the probe team.

Collusion probe

Investigators want to establish if there was collusion between suppliers and public officers that may have led to loss of money through fictitious claims involving billions of shillings.

Ms Omollo has denied that the department may have lost Sh8 billion in suspected fraudulent payments to non-existent suppliers at NYS. Instead, she said, 13 vouchers which are under investigation were paid Sh121 million and not the Sh8 billion.

In a brief to Ministry of Public Service, Youth and Gender Affairs CS Margret Kobia, Omollo said all vouchers forwarded to the team for investigations amount to Sh900 million and not Sh8 billion.

Last Thursday, President Uhuru Kenyatta met the CS and demanded answers on an intelligence brief to the effect that about Sh8 billion may have been lost.