Audit of first Sh204bn Eurobond ‘still ongoing’

Two years after the Public Accounts Committee asked for a special audit of the first Eurobond, the Auditor-General Edward Ouko is yet to come up with answers, suggesting he has given up on the matter or encountered roadblocks.

The bulk of the money from the bond was used in the 2015/16 financial year, whose accounts are the subject of the latest report of the Office of the Auditor-General, which is headed by Mr Ouko.

The AG repeats in that report the assertion from the report on the 2014/15 financial year that the National Exchequer Account had Sh203.5 billion brought forward from the 2014/15 financial year.

AUDITOR'S REPORT

“However, and as indicated in the Auditor’s Report for 2014/2015, the receipt of net proceeds from commercial financing (Sovereign/Eurobond) of Sh215.5 billion accounted for in 2014/2015 financial year could not be ascertained as investigation into the receipts, issues, accounting and utilisation of the funds related to the Sovereign/Eurobond was still on-going as at 30 June 2016,” said Mr Ouko.

He concludes: “Under the circumstances, the accuracy of the Exchequer balance of Sh203.5 billion brought forward from 2014/2015 may be affected by the outcome of the on-going special audit on Eurobond.”
Mr Ouko normally does not comment publicly on ongoing work.

In May 2016, he told the Public Accounts Committee of the National Assembly that the report on the special audit would be published by July the same year.

US, UK APPOINTMENTS

He told the MPs that his officers had secured appointments with the institutions in the United States and the United Kingdom who had been involved in the transactions.

But at a summit on anti-corruption at State House in October 2016, it appeared he had not been successful, with President Uhuru Kenyatta criticising him for the attempt to go to the Federal Reserve Bank of New York.

Mr Kenyatta memorably stated: “When you say that the Eurobond money was stolen and stashed in the Federal Reserve Bank of New York, are you telling me that the Kenyan government and United States have colluded?”
“Who is stupid here? And he (Mr Ouko) says he wants to investigate the Federal Reserve Bank of New York,” he added.

DELAY QUESTIONED

In March last year, Treasury Principal Secretary, Dr Kamau Thugge, questioned the delay by the Auditor-General to submit his report on the audit of the Eurobond despite the submission of all information needed.

Saying that he was surprised that “somehow the Auditor-General is still doing an audit”, the Principal Secretary told journalists at a meeting in Nairobi that he had information that the Federal Reserve Bank of New York had given the Office of the Auditor-General all the information required.

The PS said he met the United States ambassador in November 2016 and asked him to clarify to the Kenyan public whether the money left the Federal Reserve Bank of New York.

“He said nobody had formally asked him,” said Dr Thugge.

Treasury wrote to the Federal Reserve Bank of New York the following day, the PS said, and asked them to provide information on whether the money had been sent to Kenya.

He said the bank then wrote to the Auditor-General, with a copy to the Treasury.