CDF board on the spot for failure to recover Sh32.6m

The Constituencies Development Fund (CDF) board is on the spot over its failure to recover Sh32.6 million that was fraudulently withdrawn from its bank account six years ago.

Auditor- General Edward Ouko. FILE PHOTO | NMG 

IN SUMMARY

  • Auditor- General Edward Ouko says the Sh32,589,080 was withdrawn irregularly in the financial year 2011/12 and has not been recovered to date.
  • Mr Ouko said a bank reconciliation error dating back to the year 2007 of Sh3,522 has not been investigated or resolved to date.
  • He also questioned cash and cash equivalent balance of Sh1,564,762,110 including Sh332,537,617 held at Chase Bank Limited as an investment.

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The Constituencies Development Fund (CDF) board is on the spot over its failure to recover Sh32.6 million that was fraudulently withdrawn from its bank account six years ago.

Auditor- General Edward Ouko says the Sh32,589,080 was withdrawn irregularly in the financial year 2011/12 and has not been recovered to date.

“The bank reconciliation statement as at June 30, 2017 for Kenya Commercial Bank (KCB) #ticker:KCB account has long outstanding payments in the bank statement and not reflected in the cash book amounting to Sh32,589,080,” Mr Ouko said in a qualified audit opinion of the board’s books of accounts tabled in Parliament by Leader of Majority Aden Duale.

Mr Ouko said a bank reconciliation error dating back to the year 2007 of Sh3,522 has not been investigated or resolved to date.

Mr Ouko also questioned cash and cash equivalent balance of Sh1,564,762,110 including Sh332,537,617 held at Chase Bank Limited as an investment.

“However, Chase Bank was placed under statutory management by the Central Bank of Kenya on April 7, 2016 and the realisation of this amount is contingent upon the bank reverting back to its normal operations,” Mr Ouko said in a report dated July 13, 2018.

Chase Bank has since rebranded after its acquisition by a Mauritian lender SBM Group which completed the acquisition of certain assets and assumption of certain deposits of the then troubled lender on August 17.

SBM Holdings Limited launched the rebranded Chase Bank branches on August 20, allowing depositors to access their cash. Kenya Commercial Bank (KCB) resumed Chase’s operations on April 27, 2016, one month after the lender was put under receivership.

The CBK, which put Chase under statutory management, approved the transfer of selected assets and liabilities of Chase Bank to SBM Bank Kenya Limited through the gazette notice number 6833 of July 6, 2018.

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