Siphoning of part of the Sh3.5 billion the government allocated for youth development plans started barely two days after the money was allocated to the Ministry of Devolution and Planning, a prosecution witness said Tuesday.
Nixon Abura, a finance officer at the ministry, said he noticed “faster absorption of the funds” and alerted deputy director-general of the National Youth Service (NYS) Adan Harake who requested him to execute an accounts analysis.
“I generated a report to show what had actually been committed to ‘civil works budget on May 25, 2015 at around 3pm,” he said.
He added that Mr Harake took the report to verify and got back to him “verbally” that he had gone through the report and that some commitments needed further verification.
Mr Abura said he understood the further verification to mean that further investigation was required to find out “whether he had authorised the commitments for payments or not.”
“He never came back to me in writing and in my opinion as a finance officer there was indeed a faster absorption of the funds,” Mr Abura said.
He was testifying in a case in which former Devolution principal secretary Peter Mangiti, former NYS director-general Nelson Githinji and businessman Ben Gethi, businesswoman Josephine Kabura and 22 others are charged with Sh791 million fraud.
“There was no approval written in paper for the payments,” the witness said.
He added that design systems had been configured at NYS headquarters' in Ruaraka, Nairobi where he could not be able to see the transactions in advance.
He said he was later shown 25 copies of original vouchers in which figures had been inflated.
“ I noticed that on the Local Purchace Order (LPOs) there was an addition of figures at the end of every entry and would include zeros as in if the payment was for Sh1 million a zero would be added to make it Sh10 million to change the value,” the witness said, adding that 25 copies of original vouchers had their figures inflated.
He said there were also no minutes of a ministerial tender committee approving the payments.
The witness said he first noticed other anomalies in the vouchers at Banking Fraud Investigations Unit (BFIU) offices despite being the ministry’s finance officer.
The auditor-General told Parliament last week that special audit had noted concerns in the timing of transfers, deployments and events affecting Mr Harakhe before his appointment as an accounting officer, and noted that they seemed sequential and could be related to the fraud.
For instance, on February 20, 2015 — the day Mr Adan Harakhe replaced Dr Nelson Githinji as the accounting officer — Sh460.86 million of the Sh791.38 million that would eventually be stolen was fraudulently paid out.
“There is likelihood that the loss and the attempted loss... was planned internally and externally long before the attempted execution date, with or without the knowledge of Mr Adan G Harakhe, with the likely target being the Sh3.5 billion issued as supplementary budget to the NYS,” Mr Ouko said.