Parliament has directed the Kenya Commercial Bank (KCB) to provide a breakdown of the annual interest earned by the Ministry of Energy on deposits that were meant for a donor funded project.
The House has given KCB 90 days to provide to the office of the Auditor-General the breakdown of annual interest earned on the Kenya Energy-Sector Environment and Social Responsibility Programme Fund.
“The Accounting Officer (Energy Principal Secretary) and the Managing Director/CEO of KCB Plc should within three months of tabling and adoption of this report, provide to the auditor-General the breakdown of annual interest earned on the Fund from November15, 2007 to June 30, 2017,” Public Accounts Committee (PAC) said in a report.
Former Auditor-General Edward Ouko had flagged an amount of Sh13.46 million which according to the Ministry of Energy’s financial statements, relate to interest income earned in the year to June 2017.
“Examination of bank statements relating to the calendar years 2007 to 2016 revealed that the Fund received interest totalling Sh92.62 million during that period. However, management has not provided evidence of how the bank computed this interest amount,” Mr Ouko said in his audit.
He said a re-calculation performed on the account indicates that interest income due to the Fund from November 15, 2007 to June 30, 2017 should have been Sh134.5 million, thus resulting in underpayment of Sh41.88 million.
“Consequently, the accuracy of interest income of Sh13.46 million reflected in the financial statements for the year ended June 30, 2017 and Sh79.16 million received in prior years could not be confirmed,” he said.
Energy Principal Secretary Joseph Njoroge, in submissions to PAC, said the ministry has written to the management of the bank on several occasions in regard to the matter, seeking explanation on how the amount was computed.
“The management of the bank responded vide their letters dated December 27, 2018 and May 2, 2019 in which computation of the interest of Sh92.62 million was done,” Mr Njoroge told MPs.
Parliament adopted the recommendations of PAC which scrutinised the audited accounts of the National Government for the financial year 2016/17 on before breaking for the long Christmas recess on Thursday.