Auditor General: Sh215b Eurobond cash unaccounted for

[RV Pundit]

Let us see the Auditor General report; not the baseless spin. There is no way you can distinguish Eurobond in a ministry allocation. The only ringfenced money was the one use to retire 600M USD expensive commercial loan borrowed by Kibadinga regime.

[MOON Ki]

Let us see the Auditor General report; not the baseless spin. There is no way you can distinguish Eurobond in a ministry allocation. The only ringfenced money was the one use to retire 600M USD expensive commercial loan borrowed by Kibadinga regime.

Red: If that is so, then the Auditor General doesn't know what he's doing and should get appropriate advice from Nipateans.     He seems to think that it ought to be possible to make distinctions, even at the level of ministries---how much a ministry got from the Eurobond and what it was used for.   For example, on page 225 of his  report, he writes that:

During the year under review, the State Department of Water received Ksh 11, 170, 613, 958 funded  through the Sovereign Bond.   However, the management has not provided a list of projects that were funded by the Eurobond proceeds.  In the circumstances, it has not been possible to confirm how the Eurobond funds were utilized.

The report can be found here: http://www.kenao.go.ke/index.php/reports/cat_view/2-reports/9-national-government-and-state-corporations/69-government-ministries

[Kim Jong-Un's Pajama Pants]

Let us see the Auditor General report; not the baseless spin. There is no way you can distinguish Eurobond in a ministry allocation. The only ringfenced money was the one use to retire 600M USD expensive commercial loan borrowed by Kibadinga regime.

Red: If that is so, then the Auditor General doesn't know what he's doing and should get appropriate advice from Nipateans.     He seems to think that it ought to be possible to make distinctions, even at the level of ministries---how much a ministry got from the Eurobond and what it was used for.   For example, on page 225 of his  report, he writes that:

During the year under review, the State Department of Water received Ksh 11, 170, 613, 958 funded  through the Sovereign Bond account.   However, the management has not provided a list of projects that were funded by the Eurobond proceeds.  In the circumstances, it has not been possible to confirm how the Eurobond funds were utilized.

The report can be found here: http://www.kenao.go.ke/index.php/reports/cat_view/2-reports/9-national-government-and-state-corporations/69-government-ministries

I see how he is doing it.  If you can recall some of that money, I think the 999 million USD was deposited in the Sovereign Bond account.  And the tap sales as well.  This is the basket he is looking at.  It would appear that he has information from Treasury indicating that they funded the ministries directly from this account.

Previously there was a controversy about some letters purporting to move the monies from the Sovereign Bond account to the Consolidated Fund that the treasury posted on the Treasury's website.  The implication here is that they put the money into the Consolidated Fund first.  And then funded the ministries.

[MOON Ki]

I see how he is doing it.  If you can recall some of that money, I think the 999 million USD was deposited in the Sovereign Bond account.  And the tap sales as well.  This is the basket he is looking at.  It would appear that he has information from Treasury indicating that they funded the ministries directly from this account.

Previously there was a controversy about some letters purporting to move the monies from the Sovereign Bond account to the Consolidated Fund that the treasury posted on the Treasury's website.  The implication here is that they put the money into the Consolidated Fund first.  And then funded the ministries.

There is no way he can do the impossible. 

...

By the way, one implication of the "Water" statement is that the Eurobond money would not have gone to the ministries as just another part of a lump sum:  it appears to be regarded as  a particular type of funding, with the expectation that use can be readily determined.     

Interestingly, one of Ndii's articles was to the effect that a "heist" was carried out by "cooking the books" in terms of "allocations"/"expenditures" to/by ministries.     Be that as it may, it is (or ought to be) disturbing that 2 years after the bond issue, the Auditor General still says that

Investigations into the receipts, accounting, and use of the funds related to the Sovereign/Euro Bond are still on-going and the accuracy of the net proceeds ... is yet to be ascertained.

The other interesting aspect of the AG's report is that there seems to be quite a bit of other money just disappearing all over the place.   

[Kim Jong-Un's Pajama Pants]

I see how he is doing it.  If you can recall some of that money, I think the 999 million USD was deposited in the Sovereign Bond account.  And the tap sales as well.  This is the basket he is looking at.  It would appear that he has information from Treasury indicating that they funded the ministries directly from this account.

Previously there was a controversy about some letters purporting to move the monies from the Sovereign Bond account to the Consolidated Fund that the treasury posted on the Treasury's website.  The implication here is that they put the money into the Consolidated Fund first.  And then funded the ministries.

There is no way he can do the impossible. 

If I am right, it looks like the Treasury fed the public this story.  That the money went to the CF and then to the ministries.  In which case, Henry Rotich's and Pundit's version would be correct.  That you cannot tell Eurobond apart from everything else.  You could make educated guesses and estimates, in terms of the whole lumpsum, but Eurobond tag as an element of information is effectively lost.  And to support that claim, they released some (controversial) letters "showing movement of money from the Sovereign Bond account to the CF" on their website.

...

By the way, one implication of the "Water" statement was that the Eurobond money would not have gone to the ministries as just another part of a lump sum:  it appears to be regarded as  a particular type of funding, with the expectation that use can be readily determined.     

Interestingly, one of Ndii's articles was to the effect that a "heist" was carried out by "cooking the books" in terms of "allocations" to ministries.     Be that as it may, it is (or ought to be) disturbing that 2 years after the bond issue, the Auditor General still says that

Investigations into the receipts, accounting, and use of the funds related to the Sovereign/Euro Bond are still on-going and the accuracy of the net proceeds ... is yet to be ascertained.

Now, the AG has obviously received a different account of transactions from what the public has been told, if I understand his report.  There was a small part of Eurobond that went to the CF as expected - if that disappears, it will disappear as part of a blob.  But the 999 million USD and the tap sales went into the SB.  It is possible to know the Eurobond money if they move it directly from SB to the ministries.  They appear to have informed or given the AG reason to believe this is what happened.  This alone would contradict what Treasury has been spoon-feeding the public for months.   Suspect? yes.  But possibly forgivable in that environment if the transfers can be traced.  The AG is saying this has not happened, at least in verifiable terms.

The other interesting aspect of the AG's report is that there seems to be quite a bit of other money just disappearing all over the place.   

Man cannot subsist on grass alone.

[MOON Ki]

The other interesting aspect of the AG's report is that there seems to be quite a bit of other money just disappearing all over the place.   

Man cannot subsist on grass alone.

Quite true.   None of us is a goat, and Kenyans are especially known for their fondness  for nyama choma.   

Still, it is somewhat surprisingly that the Opposition does not care to highlight such things.   I did a few sums  on this latest report, and the numbers are staggering.

The AG brings this up year after year, but nobody seems to care.   Sample:

Last year, Sh338 billion of the total government expenditure for 2011/2012 was unaccounted-for. The total budget for the 2012/2013 financial year stood at Sh1.45 trillion, of which 30 per cent or Sh483 billion is likely to be misappropriated, he reckons.

http://www.standardmedia.co.ke/article/2000107710/sh500b-state-funds-cannot-be-accounted-for-says-auditor-general-edward-ouko

How much was borrowed in the Eurobond?   How much was borrowed for the SGR?   

In some cases the theft is so blatant that even a River Road manamba cannot miss it.    An example in this report is what the AG calls an "excess and illegal payment" of Sh. 145 million by the Ministry of Defense: someone paying Sh. 185m for two excavators valued at Sh. 40m.   

[RV Pundit]

How is the AG report helpful. He need to tell us more. How did the money get disbursed from IFMIS. The 10b given to Ministry  was for which project?  Which bank account was the money banked? Who were the fake contractors.Unless this is summary report - this sound political - not a technical report you expert from an auditor.

[MOON Ki]

How is the AG report helpful. He need to tell us more. How did the money get disbursed from IFMIS. The 10b given to Ministry  was for which project?  Which bank account was the money banked? Who were the fake contractors.Unless this is summary report - this sound political - not a technical report you expert from an auditor.

It is the Treasury that claims the Water Department got the Sh. 11 billion.    So questions as to bank-acccount and for-what really ought to be directed at Treasury.   All the AG has been trying to do---apparently unsuccessfully---is determine what the money was used for.    (And he had earlier warned of the danger that the Eurobond money could be used in ways other than what iit was intended for.)

[Kim Jong-Un's Pajama Pants]

The other interesting aspect of the AG's report is that there seems to be quite a bit of other money just disappearing all over the place.   

Man cannot subsist on grass alone.

Quite true.   None of us is a goat, and Kenyans are especially known for their fondness  for nyama choma.   

Still, it is somewhat surprisingly that the Opposition does not care to highlight such things.   I did a few sums  on this latest report, and the numbers are staggering.

The AG brings this up year after year, but nobody seems to care.   Sample:

Last year, Sh338 billion of the total government expenditure for 2011/2012 was unaccounted-for. The total budget for the 2012/2013 financial year stood at Sh1.45 trillion, of which 30 per cent or Sh483 billion is likely to be misappropriated, he reckons.

http://www.standardmedia.co.ke/article/2000107710/sh500b-state-funds-cannot-be-accounted-for-says-auditor-general-edward-ouko

How much was borrowed in the Eurobond?   How much was borrowed for the SGR?   

In some cases the theft is so blatant that even a River Road manamba cannot miss it.    An example in this report is what the AG calls an "excess and illegal payment" of Sh. 145 million by the Ministry of Defense: someone paying Sh. 185m for two excavators valued at Sh. 40m.   

The same reason I am confused elsewhere on the thread what the whole point of the AG report is.  Who is supposed to follow up?  Is it EACC?  Police?  DPP? Raila?  David Ndii?  Parliament perhaps?

The 30% theft figure has been known for a few years now.  Most of it garden variety daylight robbery.  It seems to bother exactly nobody, including(perhaps especially) the opposition.  The whole state apparatus seems to have some sort of symbiosis when it comes to the issue.  None of these guys is interested in anything more than lip service.

[Nefertiti]

Assassin,

The Auditor General's report should be taken up by Parliament - it is an independent constitutional office. PAC, PIC, etc. These watchdog committees are chaired by the Opposition for this very reason. This is where our dysfunction and runaway corruption stinks to light years away.

[Kim Jong-Un's Pajama Pants]

Assassin,

The Auditor General's report should be taken up by Parliament - it is an independent constitutional office. PAC, PIC, etc. These watchdog committees are chaired by the Opposition for this very reason. This is where our dysfunction and runaway corruption stinks to light years away.

No mystery why this is going exactly nowhere.  Also no mystery why the opposition's campaigns are virtually mute on corruption.

[MOON Ki]

The same reason I am confused elsewhere on the thread what the whole point of the AG report is.  Who is supposed to follow up?  Is it EACC?  Police?  DPP? Raila?  David Ndii?  Parliament perhaps?

The 30% theft figure has been known for a few years now.  Most of it garden variety daylight robbery.  It seems to bother exactly nobody, including(perhaps especially) the opposition.  The whole state apparatus seems to have some sort of symbiosis when it comes to the issue.  None of these guys is interested in anything more than lip service.

Perhaps everyone is eating and therefore not keen that things should be put under the microscope.    And, as you noted earlier, perhaps even Wanjiku herself doesn't care as along as the eating is done by the "right" people.  The AG's report is yet another huge confirmation of a "bandit economy", but look at the trivia that is currently keeping the Kenya media busy and the wananchi excited.   Does anyone really care?

Politicians are fond of telling the youth that they are "the future of our great country".    The less that is actually so, the more often the line is repeated.    But ironically or incredibly or whatever, that is actually so in the case of Kenya: at some point they will stop buying the stories of how they will leap from boda-boda to getting rich in the "Silicon Savannah"---just wait for 2030, etc.---and go grab it for themselves.    To my mind, the signs are already there.   For example, where Pundit sees something positive in more and more people being employed as watchmen, I see signs of dangerous inequities in society.   

The current reality is that even an attempt at an honest discussion of anything is impossible---tribe, politics, etc.  (Just take a look at the various insults flying about in the social media.)

Real change in Kenya will come "the hard way".    Our history shows shows that to be the "preferred" way.

[Kim Jong-Un's Pajama Pants]

The French are shaking up Lagarde - she gave the Eurobond a clean bill of health - and going after 445 million USD.  What are these guys?  Paupers?

The accusations stem from Lagarde's handling of a dispute with Tapie, a colourful businessman and former minister who claimed a state bank defrauded him in its sale of sportswear giant Adidas.

Tapie owned Adidas between 1990 and 1993 but lost control of it after he went bankrupt. He also owned the Marseille football team.

On becoming finance minister in 2007 under the newly elected president Nicolas Sarkozy, Lagarde ordered that Tapie's long-running battle with the state be resolved by arbitration.

The decision was hugely costly, with Tapie initially walking away with a staggering 404 million euros ($445 million) in compensation in 2008. After a lengthy court battle, he has since been ordered to repay it.

Investigators suspect the arbitration process was rigged in favour of Tapie, who had supported Sarkozy in his 2007 election campaign.

Lagarde, who served as finance minister from 2007 until 2011, has always insisted she acted in France's best interests.

Although she is not accused of personally profiting from the payment, she has been criticised for failing to challenge the award.

http://www.theeastafrican.co.ke/news/IMF-boss-Lagarde-to-go-on-trial-in-France/2558-3379432-gcqmv0z/index.html

[MOON Ki]

The French are shaking up Lagarde - she gave the Eurobond a clean bill of health - and going after 445 million USD. 

Not quite.   The IMF statement one was a carefully worded one that seemed to say something but actually said nothing.    It stated that they could confirm that money had been received by the government and was therefore accessible for the government's use.     I don't think anyone disputes that.

[Kim Jong-Un's Pajama Pants]

The French are shaking up Lagarde - she gave the Eurobond a clean bill of health - and going after 445 million USD. 

Not quite.   The IMF statement one was a carefully worded one that seemed to say something but actually said nothing.    It stated that they could confirm that money had been received by the government and was therefore accessible for the government's use.     I don't think anyone disputes that.

Agreed.  The auditor general himself thinks it was in the Sovereign Bond and now it's not.  Even if he cannot tell you where it went.  Henry Rotich and Agnes Odhiambo say it was transferred to CF in drips - a secret they have obviously kept from the auditor general.