Auditor flags Sh9.7billion unused Covid funds

The National Treasury has been criticized by the Auditor-General for delaying the use of Sh9.7 billion that was raised to deal with the Covid-19 pandemic.

The report on the accounts of the Treasury for 2020–21 fiscal year which was submitted to Parliament, revealed how the National Treasury failed to use the Covid–19 fund.

Although the fund has been around since the pandemic was first announced in March 2020, the audit report states that no spending of the accrued monies has been made since the fund’s creation.

Despite the fact that the fund was established to lessen the pandemic’s consequences at a time when the nation’s resources were already strained thin.

“In the circumstances, the fund did not achieve its objective of alleviating the effects of the Covid-19 pandemic as envisaged. The funds did not realise value for money as the resources remain held idle while the citizens suffer from the scourge,” the report states.

The Covid-19 Emergency Response Fund was established by the National Treasury Cabinet Secretary, according to a special audit report by the Auditor-General Nancy Gathungu on the use of Covid-19 money by the national government entities for the period of March 13, 2020 to July 31, 2020.

The four bank accounts managed by the National Treasury had closing balances of Sh9.86 billion as of July 31, 2020, contrary to the report’s estimate of Sh9.7 billion in unspent funds as of June 30, 2021.

Julius Muia, the National Treasury’s principal secretary, was the only signer on the four bank accounts the organization formed in connection with the Covid-19 emergency reaction fund.

They include three distinct accounts opened at the Central Bank of Kenya that received Sh288.75 million in donations from well-wishers, Sh9.39 billion in donations from the nation’s investigative and prosecutorial agencies, and Sh179.21 million in voluntary pay cuts from various state officials, including the president, his deputy, and cabinet secretaries.

The National Bank of Kenya opened the fourth account, which contained Sh6.3 million.

It seems odd that the money is still unused given that the government went out and obtained loans from development partners to help deal with the pandemic’s effects.

The PFM (Covid-19 Emergency Response Fund) Regulations 2020 require a properly constituted board to handle the fund, thus the Auditor-General has criticized the kitty’s continued existence in this regard.

“The management indicated that there exists a similar fund under the Office of the President, with a fully constituted board and whose roles and mandate are similar to the fund being run by the National Treasury,” says the report.

The auditor reminded that there is no proof that the current board was chosen in accordance with the PFM (Covid-19 Emergency Response Fund) Regulations of 2020.

The audit also revealed that there is another bank account, with the account number Kenya Covid-19 fund, that is run by Absa Bank Kenya PLC in addition to the other four bank accounts.

The Covid-19 Emergency Fund Board, which was founded by President Uhuru Kenyatta, opened the account number.

The national government, working through the National Treasury, secured financial assistance from a number of donors for both fiscal support-economic stimulus programs and Covid-19 mitigation programs.