Kenyan auditors to visit US for special Eurobond probe
What you need to know:
Auditor-General Edward Ouko's office has secured appointments with top US and UK financial institutions as part of an ongoing audit of the $2 billion transaction at the centre of a bruising battle between the Kenyan government and the opposition.
Mr Ouko has expressed confidence that the team that will travel to London and New York will get all necessary information and records for answers to all the issues raised.
Kenya’s top forensic auditors will visit London and New York mid next month to collect data from international banks that handled the controversial Sh250 billion Eurobond cash, Auditor-General Edward Ouko told Parliament on Wednesday.
Mr Ouko said his office had secured appointments with top US and UK financial institutions as part of an ongoing audit of the $2 billion transaction at the centre of a bruising battle between the Kenyan government and the opposition.
The auditors will visit JP Morgan, Federal Reserve Bank, City Transaction Services New York, JP Securities, Barclays Bank, ICB Standard Bank and Qatar National Bank to scrutinise the transactions data, Mr Ouko said. “We are now in a position to say that we have been given appointments to see JP Morgan and other banks that handled the $2 billion Eurobond transactions,” he told the National Assembly’s Public Accounts Committee (PAC).
The team will initially visit London and New York for a date with JP Morgan, which was the receiving bank for the Eurobond proceeds, before inspecting the transaction records at the Federal Reserve Bank where the contested Sh100 billion was transferred to the Central Bank of Kenya (CBK) account.
“We are working on visas to facilitate our travel mid next month,” he said.
Mr Ouko was in Parliament to provide a status report on delays in finalising the special audits of the Eurobond, the Sh791 million National Youth Service (NYS) scandal and the Integrated Financial Management Information System (IFMIS) audit.
He promised to table the NYS forensic audit next Monday, IFMIS by mid-June and the Eurobond report in mid-July.
Kenya floated the $2 billion bond in the European market for infrastructure development and budgetary support.
PAC expressed concerns with the delay in tabling the Eurobond forensic audit report despite the political heat the matter continues to generate locally. Opposition Cord Coalition has claimed that at least Sh100 billion of the Eurobond proceeds cannot be accounted for.
Committee chairman Nicholas Gumbo and his deputy, Jackson Rop, said PAC members were being accused of complicity in the cover-up of the massive theft of Eurobond funds.
Mr Gumbo said committee members were being attacked in public for failing to investigate the alleged theft yet PAC had tasked the national audit office to conduct a forensic audit on the procurement of the bond and how the money was spent.
“Eurobond is an extensive matter and it’s coming to the Auditor-General after everybody else has been involved. I was asked to audit it after the Ethics and Anti-Corruption Commission (EACC) and the Director of Public Prosecutions had investigated the same,” Mr Ouko said in response.
He said that investigations into whether Eurobond money came to Kenya or not will be done through three key pillars, starting with how the money was raised (financing side), how the money moved from foreign bank accounts to the CBK and on to the Treasury, and how it was spent (appropriations).
Mr Ouko said the appropriations (expenditure) pillar and the local component on how the money moved between the CBK and Treasury was progressing well. Investigating teams have been scrutinising appropriations by every ministry and have independently collected information from the ministries, he said.
“There is a lot of information out there. People have talked. I am contacting all those linked to the financing pillar. We need to go to those people wherever they are. We need to know all the accounts that were used in the transactions so that we can analyse the paper trail,” Mr Ouko said, adding that the slow pace at which the investigations are moving is partly because he had to write to each of the foreign financial institutions asking for access to the relevant documents.
Most of the financial institutions abroad had to check what authority the Kenya National Audit Office (KeNao) was using to ask for the information and access to their financial systems before granting their permission.
Mr Ouko expressed confidence that the team that will travel to London and New York will get all necessary information and records for answers to all the issues raised.
He told the committee that the Eurobond forensic audit would affect the tabling of the 2014/15 government books of accounts because its effect must be factored in the report. The tabling of the audit report in Parliament as required by law has delayed for five months.
On the NYS special audit, Mr Ouko said the report had been handed over to the Ministry of Devolution and Planning, which wants to clarify a number of issues before the report can be released to Parliament.
“We have had to do a proper audit to respond to your concerns beyond the Sh791 million. There were many other funds that went through NYS. The report gives you the whole view of the NYS and its money. There are a lot of amounts involved, little, medium and big, which have gone through,” Mr Ouko said.