Looting Spree At Anti-Doping Agency of Kenya (ADAK), CEO Sarah Shibutse in Hot Soup.

In the midst of fight against doping menace in Kenya that puts the nation  at risk of an international ban, with 25 athletes as of last year 2022 hit with sanctions and 19 active cases pending in 2022 alone despite renewed efforts to stamp out the scourge, the Anti-Doping agency officials have been milking dry the agency behind the scenes.

Audit Report

The looting spree is contained in the Board Paper from the Audit and Risk Management Committee Meeting held on Tuesday 14/3/2023. The full board meeting was held on 8th December 2022.

According to the paper, there was a fraudulent payment of Sh1.95 million for supply and delivery of assorted cartridges from Jop Tech Ventures Limited. The audit found out that the goods were never delivered but the money was paid.

“A stock count for the 4th quarter conducted on 30th June 2022 did not reflect the said toners. This was clear evidence that they had not been delivered despite being alleged to have been delivered on December 2021,” the audit report states in part, on the same.

Another company, Combrites Enterprises is said to have been registered solely for a tender that had been floated. The Anti-Doping Agency incorporated Combrites among suppliers for medium ICT equipments.

There were also a fraudulent double payment to two firms totaling Sh1.5 million. Galen Empire Enterprises and Riarma Enterprises were awarded the same tender and paid in full, thereby leading to a loss of over Sh1.5 million by the Anti-Doping Agency.

“The Committee also established that the evaluation report that awarded Riarma Enterprises the tender was a photocopy of the Evaluation report that awarded the tender to Galen Empire Enterprises. The Committee further established that the evaluation report that awarded the tender to Riarma Enterprises was not accompanied by the respective minutes, yet the fictitious Riarma enterprises documents which were used for payments of Kshs 761,600 had the minutes attached,” the audit report stated in part.

The HP Toners that were supposed to have been supplied by the two firms, Riarma and Galen, were also missing from the stores. Meaning they supplied ‘air’. The above was confirmed by a Stock Take that was taken on 30th September 2022 and 29thAugust 2022.

“The store ledger and stock control card for toner HP 508A was updated up to 3rd August 2022 reflecting a balance of two sets of toners. However, a physical stock count of the Agency’s stock conducted on 29th August 2022 by a team of five (5) staff members physically traced one set of the said toners. The Committee therefore confirmed that there was sufficient evidence to conclude that the fictitious 14 sets of toners purported to have been supplied were never delivered,” the audit report further stated.

Money Laundering Kairu and Kimani Advocates.

The Anti-Doping Agency of Kenya had hired the law firm, Kairu and Kimani Advocates to handle its legal matters. One would expect that it is the same company that would receive monies on its behalf.

However, according to the audit report, a Mr Stanley Mwakio Mwandagha, received the monies totaling Sh3.2 million on behalf of Kairu and Kimani Advocates. Mark you, there’s was nowhere that Mr Stanleyt Mwakio requested to be paid on behalf of the law firm. The payment was signed by the CEO Sarah Shibutse and the accountant.

“Available evidence indicate that the Agency disbursed the funds to the personal ban] account KCB. No: 1203114133 of Mr Stanley Mwakio instead of the Kairu Kimani and Advocate: bank account”, the audit report noted.

The audit committee says they are in possession of un-authenticated receipts from the law firm, which indicates that the funds were received, but there are no records of ADAK processing the payments to the law firm.

Both the CEO and account at ADAK failed to comply with the Public Finance Management Act of 2012 section 68(1). The accountant, a Mr Simon Katee, also failed to comply with the PFM regulations and finance manuals.

The audit committee also established that ADAK lost over Sh500k through fraudulent payment of social media engagements.“There weere no evidence of invoices and receipts proving that Facebook received the money,” the audit report noted.

Forgeries

The audit committee also established that the agency lost Sh326,000 through malfeasant; for forged work tickets. The entries in the original work tickets differed with copies that were used to surrender the imprest.

“The Committee established that the officers authorized to undertake the survey in Mombasa and Eldoret were unable to account for their journeys as per the work-tickets used to surrender the imprest,” the report stated in part.

The audit report added, “The following officer: Madam Betty Kitawa, Mr Vincent Ongera, Mr. Peter Mwakazi, Madam Edna Koitie and Mr. Nemwel Arama colluded to defraud the Agency a sum of Kshs 326,200.00 on a fictitious market survey”.

There were other imprests that were fraudulently awarded, to different staff members, amounting to Sh6.8 million. Over 60% (Sh4.08 million) of the above mentioned imprest was utilized in the CEO’s office.

The audit committee’s report precisely names, a Mr Alfred Anditi, who holds the role of transport officer assumed the role of finance and accounts and procurement. Mr Anditi received Sh200k imprest unprocedurally and irregularly. His claims to the payment was not supported by any approval as required by the PFM Act.

The CEO Sarah Shibutse and the accountant Simon Katee are liable for the loss of money at ADAK, as they continued to authorize fraudulent imprests even without approvals.

“The Committee did not obtain a substantive explanation(s) on how the Agency can process an imprest twice a day (Kshs 400,000) thrice a month (Kshs 600,000) or even four times (Kshs 800,000) a month,” the audit report wondered.

Ghost Deliveries​

The committee also found out that the agency purchased 100 reams of conqueror papers. The Sh580,000 was paid to Riarma Enterprises vide voucher number TRF0350. A stock take showed the papers did not arrive at ADAK.

Riggles General Merchants Limited received Sh2,980,000 for fictitious research activity. The company is not registered to carry out research in Kenya. As per law, every research firm in Kenya must have authorization from the National Commission For Science, Technology & Innovation (NACOSTI).

The audit committee’s recommendations, that the CEO has refused to implement, recommends that staff members, Martin Sisa Yauma, Simon Katee and Madam Betty Kitawabe surcharged for the fraudulent payment to Riggles General Merchants Limited.

Another firm, Ujuzi Consultancy Limited was paid Sh2.7 million for fictitious research activity.

In total The Anti-Doping Agency of Kenya lost over Sh21 million through procurement malpractices and creative accounting.

COMMITTEE GENERAL FINAL RECOMMENDATIONS

1. The Kenya Constitution 2010, article 205(a) provides that there shall be openness and accountability in financial matters, (d) public money shall be used in a prudent and responsible way. In addition, the Public Finance Management Act of 2012, Section 202(1) indicates that “A public officer is personally liable for any loss sustained by the National Government that is attributable to-(a) the fraudulent or corrupt conduct, or negligence, of the office.” Therefore, the Committee strongly recommends that the loss of public funds as enumerated in this Board paper MUST be recovered from the culpable officers.

2. The CEO, Madam Sarah Shibutse, who is the Accounting Officer and the AIE holder for the Agency has knowingly, grossly and continuously failed to protect public funds by facilitating, signing, approving, and authorizing fraudulent payments amounting to KShs.21,971,812. She failed to adhere to Public Finance Management ACT of nom Section 68(1) which asserts that “an accounting officer for a national government entity, Parliamentary Service Commission and the Judiciary shall be accountable to the National Assembly for ensuring that the resources of the respective entity for which he or she is the accounting officer are used in a way that is -(a) lawful and authorized; and (b) effective, efficient, economical and transparent. In view of the above findings, the Committee strongly recommends the interdiction of the CEO to pave way for further forensic investigations by the EACC and Director of Criminal Investigations.

3. The Senior Accountant, Mr. Simon Eater who is supposed to be a custodian of Public Financial Management Processes and Procedures has outrightly, grossly and continuously flouted the Public Financial Management Act and processes which led to the loss of public funds. Therefore, the Committee recommends the interdiction of the said officer to pave may for further investigations by the EACC and Director of Criminal Investigations.

4. The Procurement officer, Madam Betty Kitawa who is supposed to be a custodian of Public Procurement Processes and Procedures has outrightly, grossly and continuously flouted the Public Procurement processes which led to the loss of funds. Therefore, the committee recommends the interdiction of the said officer to pave way for further investigations by the EACC and Director of Criminal Investigations.