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Daily Nation : February 4th 2014
10 | National News NACADA ROW How top officials stole Sh400m drugs war money in shady deals Managers plundered cash by falsifying bank statements, receipts and failing to remit money to the head office BY GRIFFINS OMWENGA email@example.com D etails of how more than Sh400 million meant for national anti-drug abuse campaigns were mismanaged through fraudulent transactions by government officials can now be revealed. A government audit report in the possession of Daily Nation shows that officials of the National Authority for the Campaign Against Drug Abuse (Nacada) in 29 districts brazenly plundered the money through falsifying bank statements, receipts and failing to remit revenues to the agency’s headquarters. The money lost could pile up to billions of shillings when the audit covers all the 296 districts over the next three months, audit committee chairman and Nacada director Fazul Mahammed told the Nation yesterday. Lose billions So far, only 59 districts have been audited. It means that if the trend is sustained, the agency could end up losing up to Sh2 billion when all the districts are audited. The investigations, con- ducted by Treasury’s Internal Audit Department, shows that some districts lost up to Sh3.2 million through the theft in one financial year alone. Last month, Nacada chair- man John Mututho announced the loss of Sh400 million but could not give details of how this happened. According to the report, some top managers and district DAILY NATION Tuesday February 4, 2014 AUDIT | In some cases, whiteout markers were used to alter figures so that the originals entered in receipt books cannot be verified AUDIT FINDINGS Kisii Central District District did not account or provide bank deposit slips totaling Sh3,031,000 earned from issued alcoholic drink licences and application fees. ANTHONY OMUYA | NATION Nacada chief executive Wiliam Okedi (left) and chairman John Mututho during a press conference in Nairobi last week. heads of the agency falsified bank receipts to cheat the system and divert the money into their pockets. Some plucked out receipt book pages while others used whiteout markers to alter figures to siphon the funds in the shady deals. “Examination of duplicate and triplicate copies of issued alcoholic drink licences revealed many blank duplicate copies while triplicate copies were filled with applicants and licence fees paid,” said the audit report signed by Ms Mary Mumbi on behalf of Auditor General Edward Ouko. “This is a ploy that could have been used to alter and reduce further alcoholic drinks fees submitted to Nacada owing to the district habit of collecting fees in cash,” the report dated September 11, 2013 said. In Embakasi District, an official submitted 23 fake Cooperative Bank deposit slips totalling Sh1.3 million, accom- panied by respective duplicate alcoholic drink licences. “The money could not be traced in the bank statement and the Cooperative Bank confirmed that the bank slips had been forged,” the report said. In Kisii County, a sample of six alcoholic drinks licences revealed reduction of fees by Sh45,000 each. However, it does not state the specific district in Kisii as there are more than 10 in the county. “The extent of the practice could not be determined because few applicants renewing licences submitted copies of original alcoholic drinks issued by the district,” the report adds. In Kisii District, the Nacada office did not account for bank deposit slips totalling Sh3.03 million earned from issued alcoholic drink licences and application fees. In the same district, the auditors discovered that some of the licence copies submitted 29 The number of districts covered by the government audit of the national anti-drugs campaign funds by applicants reflected different paid up fees from those on the duplicate and triplicate copies held by the district clerk. According to the audit re- port, the district clerk declined to produce licence book (serial numbers 23101-23150) for verification. Fake bank slips However, 14 alcoholic drink licences worth Sh665,000 were discovered to have been issued in 2011/2012 financial year and among them was licence serial number 23101 and 23149. It is difficult to determine how much was collected from the remaining 36 licences. Furthermore, the Nacada internal audit department discovered that Sh18.4 mil- ‘‘ The money could not be traced in the bank statement” Audit report lion had been lost from issue of licences across several districts. The funds, according to the audit department, were lost through faking of bank slips and altering accounts. A scrutiny of the Nacada fund book revealed several alterations made through white outs so that the original figure entered in the cashbook cannot be ascertained. The authority had received Sh125 million from the districts but there was no documentation to show all these transactions. A board meeting of the agency last week ended in disarray after accusations that some of the board members were revealing too much information to the public. Embakasi District Clerk submitted 23 fake Co-operative Bank deposit slips totaling Sh1.2 million accompained by respective duplicate alcoholic drink licences. Wajir East District The district had in its possession alcoholic drink fees totaling Sh10.3 in form of bank deposit slips that had not been submitted to Nacada. Embu North The district did not account or provide bank deposit slips totaling Sh30,000 arising from issued alcoholic drinks licences. Mbeere North District undercharged alcohol licence fees to the tune of Sh255,000. Tharaka South During field audit visit, the district clerk did not provide bank deposit slips for alcoholic drinks licences and application fees totaling Sh217,000 and Sh58,000 respectively. Maara District The district provided uncertified bank deposit slips totaling Sh44,000 issued by bank agents which could not be reconciled with bank statement. Tigania West The district did not provide application fees bank deposit slips totaling Sh11,000 for 2012/2013 financial year. The district provided uncertified bank deposit slips totaling Sh292,080 issued by bank agents which could not be reconciled with bank statement. Buuri The district charged fourteen licence holders Sh500 instead of proportionate part of fees for appropriate licence resulting to under collection/loss of Sh43,500 for businesses given three months moratorium to close down. Lenku meets agency board today BY NATION REPORTER Interior Cabinet Secretary Joseph ole Lenku will today meet with the Nacada board at his offices to resolve differences between the chairman and the chief executive officer. However, Mr John Mututho, the chairman, claimed that he had not received any official invitation from the Cabinet Secretary’s office to attend the meeting. “As I talk to you I’m in Kitale on official duty and no one from the minister’s office has told me there is a meeting between us and the Cabinet Secretary,” he said. “Unless I fly I may not make it, and if anything this message should have been communicated properly,” he told the Nation on phone last evening. Pursuing officials The chairman said he would not relent in pursuing officials he accused of embezzling money collected by the agency as licence fees. “Even if we (the board) is summoned by the Pope or State House, I will not relent in pursuing those who have embezzled public money. The millions lost through corrup- tion at the agency must be refunded,” he said. The director of communi- cations at the ministry, Mr Mwenda Njoka, confirmed the minister is scheduled to meet the team from Nacada at 10am today. He said the meeting was not about defending anyone who may be involved in corruption at the agency but the minister was only concerned that Mr Mututho was behaving like an executive chairman. “I can confirm a meeting has been slated for 10am but I cannot confirm whether Mr Mututho has formally been informed,” he said.
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