EACC to probe officials for bursary, loan fraud
Auditor-General Nancy Gathungu.
Senior officers in former Machakos Governor Alfred Mutua’s administration are facing a date with the anti-corruption agency over bursary fraud and unaccounted-for car loans and mortgages.
This follows damning revelations of how some officials were involved in altering bursary cheques and the signing of a skewed agreement with a bank to manage the county’s Sh96 million car loan and mortgage fund. Some cheques were altered by adding a zero at the end of the figure, thereby increasing the amount of money to be received by the needy students.
In her report for the financial year ending June 30, 2021, Auditor-General Nancy Gathungu flagged the anomalies, pointing to possible collusion between county officials and the bank.
Bursary fund management
“This matter is a clear case of fraud. The amounts stolen in this scheme could be higher. We direct the EACC (Ethics and Anti-Corruption Commission) to swing into action and fish out the perpetrators of the fraud,” said Senate County Public Investments and Special Funds Committee Chairperson Godfrey Osotsi (Vihiga).
The report indicated that the bursary fund management did not provide evidence of investigations and actions taken against culprits or to ensure that such incidents do not recur.
Governor Wavinya Ndeti said they detected the alteration of the amounts in figures and words on some three cheques during monthly reconciliation exercise.
Subsequently, a follow-up with the bank was made where letters were written to the institutions seeking certified receipts of the beneficiaries, details of the persons who presented the cheques and an explanation on how the alterations occurred.
During the period under review, the county was flagged over unsupported bursary disbursements where, for example, 285 students applied for bursaries but 308 bursaries were awarded in Wamunyu ward.
Spending Sh88.3m
In the previous fiscal year, the auditor had also fingered the county government for spending Sh88.3 million on bursaries without details of individual beneficiaries and the amounts awarded as well as how beneficiaries were determined.
On the car loan and mortgage fund, Ms Gathungu raised concerns over a skewed memorandum of understanding signed with SBM Bank on June 25, 2019.
According to the auditor, the criteria for determining the administration fees was not included in the agreement. Further, the balance of the funds held by the bank did not earn any interest.
In the agreement, the beneficiaries were required to open an account with the bank to qualify for a loan. But interest earned from beneficiaries was being channelled towards fund administration expenses.
Ms Ndeti told the committee her administration is in the process of reviewing the scheme to set out the criteria for fund administration expenses and interests to be earned.
