@BusinessDaily

Auditor queries legality of Sh3.5bn police insurance

11 months ago, 6 Dec 14:25

By: David Mwere

The Auditor-General's office now says that it cannot ascertain whether the payment of Sh3.5 billion for police insurance was lawful. The amount was paid to a private company to provide comprehensive group life insurance cover for police officers under contract NPS/002/2014/2015. Auditor-General Edward Ouko notes in his report that unsatisfactory matters were reported on the irregular payment of the amount, arising from the unexplained irregular award of the contract. “In view of the forgoing, I am not able to confirm that the payment was lawful and effective as required by the Constitution. "The State department of Interior did not avail payment voucher no. 391 for Sh147.2 million together with assessment report on the performance of the insurance,” Mr Ouko said. Irregular procurement The Interior ministry is on the spot, with Mr Ouko also noting irregular procurement of air tickets, irregular procurement of goods, fictitious entry in store records, irregular procurement of motorcycles, unlawful cash withdrawals, unaccounted cash transfers and falsification of records. The report tabled in the National Assembly by Leader of Majority Aden Duale shows that Sh12.7 billion in cash transfers cannot be explained. Sh8.7 billion in irregular use of 42 letters of credit by the ministry was also noted and incomplete bank statements worth Sh340 million. The Sh12.7 billion was a call deposits at INSTB, fixed deposit at INSTB, Euro call deposit and USD call deposit accounts, which is contrary to the Public Finance Management Act. The law requires prior approval by the Cabinet based on the recommendations from the National Treasury but this was not done. Fictitious, unlawful entries The auditor also noted that interests and proceeds received back into the account is Sh4.2 billion, leaving unaccounted balance of Sh8.5 billion. The report noted fictitious entry in stores records and Sh4.5 million in unlawful cash withdrawals, which is being handled by the Directorate of Criminal Investigations. The auditor noted that blank passports valued at Sh133 million were issued by Immigration department to Kenya missions in Washington DC, London, Berlin and Pretoria but they were not recorded in counter receipt book registers as required by public finance law. “The audit has established that information disclosed on stores ledger and stock control for shoes (S3 card) A241223 has been fraudulently falsified as the same card number discloses different information on April 19, 2016 and May 31, 2017,” the report said. “Examination of stores card numbers A241057 and A268592 reflects unexplained increase of 5000 and 2000 pairs of footwear respectively. The source of these receipts have not been indicated or explained.” Falsified records The audit further notes that a reconciliation undertaken on sample basis for 12 police divisions across the county show that 454 pairs of footwear were ordered and 63 pairs were issued. But records at Police Quarter Master in Nairobi are falsified to indicate that 392 pairs of footwear were issued. It also noted that 57 police field units had requested for 12,852 pairs of foot wears but 3,763 pairs were issued resulting in a shortfall of 9,089 ...
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@BusinessDaily

Auditor queries legality of Sh3.5bn police insurance

11 months ago, 6 Dec 14:25

By: David Mwere
The Auditor-General's office now says that it cannot ascertain whether the payment of Sh3.5 billion for police insurance was lawful. The amount was paid to a private company to provide comprehensive group life insurance cover for police officers under contract NPS/002/2014/2015. Auditor-General Edward Ouko notes in his report that unsatisfactory matters were reported on the irregular payment of the amount, arising from the unexplained irregular award of the contract. “In view of the forgoing, I am not able to confirm that the payment was lawful and effective as required by the Constitution. "The State department of Interior did not avail payment voucher no. 391 for Sh147.2 million together with assessment report on the performance of the insurance,” Mr Ouko said. Irregular procurement The Interior ministry is on the spot, with Mr Ouko also noting irregular procurement of air tickets, irregular procurement of goods, fictitious entry in store records, irregular procurement of motorcycles, unlawful cash withdrawals, unaccounted cash transfers and falsification of records. The report tabled in the National Assembly by Leader of Majority Aden Duale shows that Sh12.7 billion in cash transfers cannot be explained. Sh8.7 billion in irregular use of 42 letters of credit by the ministry was also noted and incomplete bank statements worth Sh340 million. The Sh12.7 billion was a call deposits at INSTB, fixed deposit at INSTB, Euro call deposit and USD call deposit accounts, which is contrary to the Public Finance Management Act. The law requires prior approval by the Cabinet based on the recommendations from the National Treasury but this was not done. Fictitious, unlawful entries The auditor also noted that interests and proceeds received back into the account is Sh4.2 billion, leaving unaccounted balance of Sh8.5 billion. The report noted fictitious entry in stores records and Sh4.5 million in unlawful cash withdrawals, which is being handled by the Directorate of Criminal Investigations. The auditor noted that blank passports valued at Sh133 million were issued by Immigration department to Kenya missions in Washington DC, London, Berlin and Pretoria but they were not recorded in counter receipt book registers as required by public finance law. “The audit has established that information disclosed on stores ledger and stock control for shoes (S3 card) A241223 has been fraudulently falsified as the same card number discloses different information on April 19, 2016 and May 31, 2017,” the report said. “Examination of stores card numbers A241057 and A268592 reflects unexplained increase of 5000 and 2000 pairs of footwear respectively. The source of these receipts have not been indicated or explained.” Falsified records The audit further notes that a reconciliation undertaken on sample basis for 12 police divisions across the county show that 454 pairs of footwear were ordered and 63 pairs were issued. But records at Police Quarter Master in Nairobi are falsified to indicate that 392 pairs of footwear were issued. It also noted that 57 police field units had requested for 12,852 pairs of foot wears but 3,763 pairs were issued resulting in a shortfall of 9,089 ...
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