State Department for Social Protection is unable to account for Ksh24.5 billion stipends meant for the elderly, disabled and orphans, auditor-general Nancy Gathungu has revealed.
According to Gathungu’s latest report, the department did not provide records for the cash transfers effected in the year to June 30, 2019.
The money should have been disbursed through the Co-operative Bank of Kenya, Post Bank, Equity Bank, and KCB Bank.
The department also lacked payrolls and reconciliation reports for also the service providers, raising questions on whether the money really reached the intended beneficiaries.
“Management has explained that it was unable to access the information, though it was enshrined in the contract, due to the confidentiality clause of the Banking Act,” Ms Gathungu said.
Worse still, the Postal Corporation of Kenya (PCK) still held Ksh169.3million in unpaid cash transfer balances, long after its agency contract with the department lapsed.
“A review of the matter during the year revealed that the status had not changed and the amount of Ksh169,300,000 due to the State Department was still outstanding. Management has not demonstrated efforts being made to recover this long overdue refund from PCK,” Ms Gathungu said.
Some of the beneficiaries, according to the audit report, were forced to open accounts with specific payment service providers (PSPs) without their consent.
“The contractual agreement with the PSPs provides for beneficiaries to identify a convenient bank of their own choice. However, information from field audit inspections revealed that some beneficiaries were coerced into enrolling into PSPs they had not applied for. The affected beneficiaries stated that their accounts were opened at KCB without their consent,” she added.
The programme, officially known as Inua Jamii, targets the elderly (over 70 years old) and orphans with monthly stipends of Ksh2,000 paid bi-monthly in lumpsum of Ksh4,000.
As of June 2020, there were 1.09 million beneficiaries, with the elderly being 764,644. The government has spent Ksh151.6 billion in the Inua Jamii scheme since its inception in 2004.