Two ex-NYS staff jailed over loss of Sh791 million

Former NYS Finance Director Samuel Wachenje when he appeared before the Parliamentary Accounts Committee. [File, Standard]

Nine years since the Sh800 million National Youth Service (NYS) scandal rocked the nation, two former officials, Hendrick Nyongesa Pilisi and Samuel Wachenje, have been sentenced to seven years and five years respectively in prison for their roles in the theft of millions of taxpayers’ money paid to phony suppliers.

The scandal, which came to light in 2015, exposed how senior officials within the NYS and the Ministry of Devolution orchestrated fraudulent payments and embezzled a staggering Sh791 million meant for a road construction project in Kibra.

The suspects are alleged to have hatched the plot to swindle public funds after the NYS supplementary budget of Sh3.5 billion was loaded into the Integrated Financial Management Information System (Ifmis) on May 19, 2015.

Other key suspects, including businesswoman Josephine Kabura Irungu, whose three companies received millions of shillings, and was heavily implicated in the scandal were let off the hook.

Also freed were businessman Ben Gethi, former Devolution Permanent Secretary Peter Mangiti, former NYS Director-General Nelson Githinji, and 20 others, who were released under Section 210 of the Criminal Procedure Code (CPC) due to a lack of sufficient evidence.

After years of legal delays and a complicated investigations, Wachenje, the former director of finance and Nyongesa, the principal supply chain management officer, were each sentenced to five years in prison for processing fraudulent payments.

Milimani principal magistrate Wandia Nyamu, while delivering the ruling on behalf of trial magistrate Wendy Kagendo, sentenced Wachenje and Nyongesa to five years each without the option of a fine for the offense of breach of trust  by a person employed in the Public Service, contrary to Section 127 of the Penal Code.

The two had authorised payments without proper oversight, which ultimately led to the loss of money.

Nyamu found that the Director of Public Prosecutions (DPP) had proven that the two men breached trust by approving payments without the necessary approval from the Ministerial Tender Committee (MTC), ultimately resulting in the loss of Sh791,385,000.

Nyongesa was sentenced to a further seven years in prison without the option of a fine for creating a forged Ministry of Public Works circular, which facilitated the fraudulent payments. “I sentenced Wachenje and Nyongesa to five years each for breach of trust. Nyongesa is also sentenced to seven years for forging a document without authority. The sentences will run concurrently,” the magistrate ruled.

This means Wachenje will serve five years, while Nyongesa will serve seven, without an option of a fine.

In its judgment, the court found that Wachenje and Nyongesa authorised 25 payment vouchers amounting to over Sh700 million for payment to three companies belonging to Kabura for goods and services that were never delivered for the construction of the Kibera road project. 

Evidence presented in court shows that out of the Sh791 million released from Treasury, only Sh78.8 million was spent on materials used in the Kibra road construction project.

“The difference between the amount paid out and the cost of materials used is Sh712.5 million. Coincidentally, this amount is almost identical to the quoted extra amount of Sh712 million, which resulted from the fraudulent act of adding zeros,” stated three road construction experts led by Engineer Peninah Mwangi.

The court found that the fraudulent actions, including the manipulation of documents and processes, led to an inflated financial commitment that did not reflect actual expenditures.

The prosecution, supported by 41 witnesses, including former NYS Senior Deputy Director-General Adan Harakhe and Nixon Oborah, the Acting Chief Finance Officer at the State Department for Planning in the Ministry of Devolution and Planning, presented evidence showing that between December 2014 and April 1, 2015, a total of Sh791,385,000 was fraudulently paid to Kabura’s firms.

This was done by manipulating 25 transaction numbers in the Integrated Financial Management Information System (IFMIS), adding zeros to the amounts, and attaching triplicate copies of Local Purchase Orders (LPOs) to the payment vouchers.

The evidence also showed that former NYS accountant Regina Nyambura Mungai, who had been transferred, but still had access to the IFMIS portal, was ordered by Nyongesa to process payments amounting to Sh800 million.