BY ALBERT NYAKUNDI
The Micro Enterprises Support Programme Trust (MESPT) in Nairobi Kenya, cannot account for millions of donor funds lost in a well-orchestrated scheme.
The scheme was crafted to defraud Denmark’s taxpayers who have sacrificed and sent cash to Kenya inform of Aid.
The loss was occasioned by laxity, incompetence and collusion by the organization’s top brass.
MESPT paid millions of shillings for services that were procured but were never provided.
Documents obtained by Hot News reveal how an Internal audit exposed malpractice at the donor funded organization.
MESPT unprocedurally awarded a consultancy tender worth Ksh 18 million and an extra Ksh 21.95 million tender for establishment of a call center that never materialized.
The audit was carried out after a request by the Danish International Development Agency-DANIDA.
This is Denmark’s channel of funding development projects in developing countries.
According to the documents, the objective of the audit was to evaluate the recruitment process of the Green Growth Technical Facility (GGTF-TA) consultant.
This was to ascertain whether engaging the consultant has led to any value addition to MESPT.
According to MESPT website DANIDA rolled out a country wide programme dubbed Green Growth and Employment Programme that was to run between 2016 and 2020.
It focuses on promoting resource efficient, clean and climate sensitive technologies and solutions through energy management, green financing, waste management among others.
Multiple sources at MESPT told Hot News this programme may have informed a section of MESPT top management to hurriedly initiate the illegal consultancy for selfish gains where the consultant was supposed to help in raising extra funds for MESPT to fulfill what DANIDA had envisioned.
The consultancy tender was awarded to Phyllis Engefu Ombonyo on November 9,2016 where David Ombonyo Ayilo witnessed the consultancy agreement between MESPT and Engefu.
The deal was sealed by the then CEO Priscilla Gathiga and witnessed by current acting CEO Charles Nyawade.
Nyawade was then a finance manager at MESPT.
The consultant allegedly never brought any funding despite pocketing millions for the job.
The call Center probe was however initiated by the MESPT board after it discovered that the project cost had been exaggerated.
The call Center was done by Red Fox Communications which is a sole proprietorship run by a Mr Mbugua Ngugi.
“The overall objective of the call Center audit was to evaluate the benefits of the project after it came to the board’s attention in November 2017 that the project had cost Ksh 21.95 million without any current or future demonstrable benefits to the organization.” Reads the audit findings.
The tender was awarded during 2017/2018 financial year.
The Audit, Risk and Governance Committee found out that the board had approved the GGTF-TA consultancy for a period of 12 months but the management overlooked this and signed a contract with Engefu for 18 months.
“The monthly payment of USD 10,000 to the consultant was made consistently every month without any supporting evidence that the terms of reference targets or deliverables had been met.” Reads the audit report.
It was also not clear which process was followed by the management in the recruitment of the consultant as it was neither MESPT nor DANIDA driven.
The Audit committee noted among other findings that MESPT irregularly paid additional USD 60 000 to the consultant.
The board recommended among other recommendations that Ms Gathiga to explain why the management continued to pay the consultant despite the consultant’s consistent failure to deliver on terms of reference.
Gathiga has since been sacked.
Interestingly, it is not clear why Nyawade,a long serving financial manager at the institution and current head of finance doubling up as acting CEO was not subjected to disciplinary action despite signing the contract as well as payment of the consultancy fees.
In the case of the call Center, it was found out that there was no concept paper developed for the project by the management.
“In the absence of a concept paper, the management did not fully understand the project management framework of the Call Center. There are no benefits to show arising from the call Center project to date. Because of the foregoing MESPT has lost a total of Ksh 21.95 million.” Adds the audit report.
In what perhaps spells doom at the institution, is lack of key managers.
There is currently no board of trustees since the Royal Danish embassy appointed a caretaker board committee in July 2019 after a previous board was dissolved in February 2019.
Nyawade has been both the head of finance and acting CEO since May 2018 and there is no head of credit.
When reached for comment, MESPT acting CEO Charles Nyawade said he cannot give his comment because the matters are in court.
Phyllis Engefu Ombonyo did not respond to calls nor text messages sent to her phone.
Mbugua Ngugi from Red Fox Communication when sought for comment said after setting up the Call Centre, MESPT gave them a notification that they will close the call Centre since not many calls were coming in as expected.
“We employed two young ladies for a whole year, and they were paid by the client (MESPT). We did our job until the contract ended. We did reports which were handed over to the client,” he said.
He added that claims that Red Fox did not do the call Centre are false.
“KPMG came to our offices, we went through the contract as awarded. That’s the crack of the matter,” he said.
He insisted that Red Fox did its work and finally handed over the call center.
He said that at the end of the contract, they agreed with MESPT to do a continuous process improvement.