Audit: Sh32 Million From Covid-19 Emergency Response Fund Board Was Sent To 7K Persons With Same Names But Different M-Pesa Numbers

Nothing is new under the sun and corruption is becoming a norm in Kenya, nothing is too divine to touch, while country struggles with the adverse effects of the pandemic that has seen incomes shrink with many left out in unemployment, the pandemic has been a blessing to a few crooks privileged to hold high offices controlling Covid funds.

To cushion Kenyans living in the urban informal sectors from the harsh effects of the pandemic, President Uhuru in 2020 established cash transfer program to the vulnerable groups in the society, including the aged too. Uhuru established the Covid-19 Emergency Response Fund Board whose primary mandate was to mobilise resources for an emergency response towards containing the spread, effects and impact of the COVID-19 pandemic. Other objectives of the fund included  supporting the government’s efforts in the supply of medical facilities and equipment and support for vulnerable communities with their immediate needs, including food.

The board developed a Cash Transfer Program of Kshs.400, 000,000 aimed at benefitting 100,000 Kenyans weekly in urban informal settlements for a period of one month.

The mapping of the vulnerable categories of persons to benefit from the cash transfer programme would be guided by considerations such as persons who were on employment but rendered jobless due to COVID-19, persons within a family set up and those who had not been beneficiaries of funds from any Government related intervention. The Board approved the cash transfer programme on 2 June,2020 and Kshs. 400,000,000 was transferred to MPESA Holding Company Limited to be disbursed to the identified beneficiaries.

According to auditor-general’s report seen by Kenya Insights, the money was transferred from an irregular account of the board at Absa to Mpesa.

The disbursements were done in 4 phases. Detailed recipient’s phone number, names, receipt number, provided for audit from Safaricom through the Fund Accountants (PricewaterhouseCoopers). Location of the recipients was, however, not indicated, and as a result, the special audit could not therefore confirm if the beneficiaries were from urban informal settlements.

The audit revealed that a total of 97,515 persons benefited from the cash transfer program. Out of these, 95,727 were registered Mpesa users while 1,788 were not registered. The highest amount disbursed to a beneficiary was Kshs 24,000 while the least amount disbursed was Kshs 1,000.

Analysis of the data provided revealed that, there were 38 payments done to the same Mpesa telephone number but with different names amounting to Kshs 72,000.

Similarly, there were 7,850 beneficiaries who shared names but had different Mpesa telephone lines who were paid a total of Kshs.32,626,000. The identity card (ID) numbers of the recipients were not provided for audit and analysis. In absence of the identity card numbers and in view of the time constraint, the special audit was not able to independently verify that the recipients of the cash transfers were the bona fide beneficiaries or that the cash was received. Consequently, the lawfulness and effectiveness of utilization of the Kshs.400,000,000 could not be confirmed.

According to a statehouse statement issued on 30 March, 2020, President Uhuru according to the COVID-19 Emergency Response Fund Regulation, 2020 established a Board responsible for the management of the fund.

Ms. Jane Karuku, was appointed the chairperson, Fred Matiang’i served in his capacity as the CS, Wycliffe Oparanya, as chairperson of the Governor’s council. Members of the board included; Michael Joseph, James Mwangi, Dr. Narenda Raval, Joshua Oigara, Jeremy Awori, Wachira Waruru, Mohammed Hersi, Ms. Phyllis Wakiaga and Kennedy Kihara as the secretary.

The audit report has faulted the management of the fund red flagging it’s oversight framework.

The audit established that on 12 June 2020, the Fund Board registered the Kenya Covid-19 Emergency Fund Limited under the Companies Act, 2015 as a Company limited by guarantee. The audit noted that the Fund Board approved the establishment of the Fund as a corporate entity for procurement and logistics purposes in a Board meeting held on 14 April, 2020.

The certificate of incorporation indicates the Company Registration Number as CLG- PPFDDA and the registered office of the company as ALN House, Eldama Ravine Close Off Eldama Ravine Road, P.O. Box 200-00606 – Sarit Centre.

It was not clear why an entity established under the Public Finance Management (COVID- 19 Emergency Response Fund) Regulations, 2020 as the COVID-19 Emergency Response Fund Board with clear governance, management structures, systems and procedures outlined in the Public Finance Management Act, 2012 and the attendant Regulations was again registered as a Company Limited by Guarantee under the Companies Act, 2015 indicating it was a private company receiving donations from well-wishers.

A review of the inauguration Board meeting minutes (MIN 5/1/4/20 held on 1 April 2020) notes that the Members were briefed about the Fund Regulations issued by the National Treasury but unanimously resolved to adopt a private sector steered approach for purposes of instilling and assuring public confidence in the process. The Board decided to develop its own procedures and workplan in the performance of its mandate.

The audit established that, the Fund opened a Bank Account with Absa Bank Kenya PLC, the account name being Kenya COVID-19 Fund, Account Number 2042554653 at Absa Towers Branch. Though the decision to open the Bank Account was approved by the Fund Board, there was no evidence of approval by the Cabinet Secretary to The National Treasury for opening the Bank Account. The Fund also operated an MPESA pay-bill number 999000.

In her submissions, Nancy Gathungu, the auditor-general has recommended that the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations should conduct further investigations to establish acts of criminality in all irregularities identified by this special audit.