Report On Consideration Of The Audited Accounts For The National Humanitarian Fund For The Fys 2020/2021 And 2021/2022

DATE:

29JUL 2025

.2

REPUBLIC OF KENYA THE NATIONAL ASSEMBLY

THIRTEENTH PARLIAMENTFOURTH SESSION

SPECIAL FUND ACCOUNTS COMMMITTEE

REPORT ON THE CONSIDERATION OF THE AUDITED ACCOUNTS FOR THE NATIONAL HUMANITARIAN FUND FOR THE FINANCIAL YEARS 2020/2021AND 2021/2022

• DIRECTORATE OF AUDITAPPROPRIATIONS
• &GENERALPURPOSE COMMITTEES, NATIONALASSEMBLY PARLIAMENT BUILDINGS NAIROBI

JULY2025

| Tableof Contents 1.0PREFACE. | |------------------------------------------------------------------------------------------------------------------| | 1.1EstablishmentandMandateofSpecialFundsAccountsCommittee | | 1.2 CommitteeMembership | | 1.3CommitteeSecretariat | | 2.0EXAMINATIONOFTHEAUDITORGENERALREPORTFORNATIONAL HUMANITARIANFUNDFORFINANANCIALYEAR2020/2021AND2021/2022.....1 | | 2.1 Examination of the Auditor General reports for National Humanitarian Fund for the financial year2020/2021 | | 2.2 Examination of the Auditor General reports for National Humanitarian Fund for the financial years2021/2022. |

LISTOFABBREVIATIONSANDACRONYMS

CoK

Constitution of Kenya, 2010

CBK

Central Bank of Kenya

FY

Financial Year

IDPs

Internally Displaced Persons

MDAs

Ministries, Departments and Agencies

NHF

National Humanitarian Fund

PFM

Public Finance Management

OAG

Office of the Auditor-General

PSASB

PublicSectorAccountingStandardsBoard

RTGS

Real Time Gross Settlement

CHAIRPERSON'SFOREWORD

Hon. Speaker,on behalf of the Special Funds Accounts Committee and under Standing Order 199, it is my pleasant duty and honour to present to the House the report of the Committee on consideration of thereportsof theAuditor-General on theauditedfinancialstatementsfor the National Humanitarian Fund for thefinancial years 2020/2021 and 2021/2022.

Oversightovernationalrevenue and expenditureis amongsttheroles of theNationalAssembly as stipulated under Article 95 (4) (c) of the Constitution of Kenya, 2010.Further,Article 226 of the CoKprovides that an Act of Parliament shall providefor the designation of an Accounting Officer in every public entity at the national level who is accountable to the National Assembly for its financial management. In addition, Article 229(8) mandates this House to debate and take appropriateactiononauditreportsfromtheAuditor-General.

In fulfilment of these constitutional provisions,the National Assembly established various Committees toexaminereportsof theAuditor-General toascertainwhetherpublicfunds are utilized in a lawful, authorized, effective, efficient, economical, and transparent manner. The Special Funds Accounts Committee was established in the Fifth Session of the Eleventh Parliament following the review of the National Assembly's Standing Orders, is one of the Committees.

The Committee received oral and written submissions from Mr. Raymond Omollo, the Principal Secretary,StateDepartmentInternal Security and National Administration and theAccounting Officer of the Fund, regarding the audited financial statements for the Financial Year 2020/2021 and 2021/2022. The submissions formed the basis of the Committee's observations, findings, andrecommendations.These are alsocontained in the Minutes and Hansard Reportsof Committee proceedings.

Hon. Speaker, I wish to express appreciation to the Honourable Members of the Committee, the Office of the Speaker,the Clerk of theNational Assembly,theParliamentary Liaison Offices of theAuditor-General and theNational Treasury and the CommitteeSecretariatforfacilitatingthe Committeein the production of this report.

HON.FATUMAZAINABMOHAMMED,M.P. CHAIRPERSON,SPECIALFUNDSACCOUNTSCOMMITTEE

CHAPTERONE

1.0PREFACE

1.1Establishment and Mandate of Special Funds Accounts Committee

1. The Special Funds Accounts Committee is one of the six Watchdog Committees of the NationalAssembly established under Standing Order 205.It is mandated to examine the reports of the Auditor-General on thefollowing:

• i) Funds establishedby statute or by subsidiary legislation,except Funds under Standing Order205B(DecentralizedFundsAccountsCommittee)
• i) TheEqualizationFund;

4. ii) TheEqualizationFundAdvisoryBoard; 5. iv) ThePoliticalPartiesFund;and 6. v OtherfundsasmaybecommunicatedbytheHonourableSpeaker

1.2 Committee Membership

2. The Committee comprises the following members:

| S/N | Name | Constituency | Party | |-------|--------------------------------------------------|------------------|-------------| | 1 | Hon.Fatuma Zainab Mohammed, MP (Chairperson) | Migori (CWR) | Independent | | 2 | Hon.Dawood Abdul Rahim,HSC,MP (Vice Chairperson) | North Imenti | Independent | | 3 | Hon. Otucho Mary Emaase Mp, MP | Teso South (CWR) | UDA | | 4 | Hon. Charles Ngusya Nguna, MP | Mwingi West | Wiper | | 5 | Hon. Dr. Christine Ombaka Oduor, MP | Siaya (CWR) | ODM | | 6 | Hon.Erastus Kivasu Nzioka,MP | Mbooni | Wiper | | 7 | Hon. Eve Akinyi Obara, MP | Kabondo Kasipul | ODM | | 8 | Hon. Joseph Majimbo Kalasinga, MP | Kabuchai | FORD-K | | 9 | Hon. Tom Mboya Odege, MP | Nyatike | ODM | | 10 | Hon. Catherine Nakhabi Omanyo, MP | Busia (CWR) | ODM | | 11 | Hon. Cecilia Asinyen Ngitit, MP | Turkana (CWR) | UDA | | 12 | Hon. Erick Kahugu Wamumbi, MP | Mathira | UDA | | 13 | Hon. Joseph Kimutai Cherorot, MP | Kipkelion East | UDA | | 14 | Hon.Onchoke Charles Mamwacha,MP,MP | Bonchari | UPA | | 15 | Hon. Paul Kibichi Biego, MP | Chesumei | UDA |

1.3CommitteeSecretariat

3. The Secretariat facilitating the Committee comprises the following staff:

| S/N | NAME | DESIGNATION | |-------|-----------------------|----------------------------------| | | Mr. Erick Nyambati | Senior Clerk Assistant | | 2. | Ms. Comfort Achieng | Clerk Assistant III | | 3 | Mr. Nimrod Mate | Clerk Assistant III | | 4 | Mr.Robert Ngetich | Fiscal Analyst II | | 5 | Ms. Judith Kanyoko | Legal Counsel II | | 6 | Ms. Bevaline Mosoti | Research Officer III | | 7. | Mr. Derrick Kathurima | MediaRelationsOfficerIll | | 9 | Ms.Felistus Muiya | Public Communications OfficerIIl | | 10 | Mr.Peter Mutethia | HansardAudioOfficerIII | | 11 | Mr.Joshua Lenambet | SerjeantAtArms |

CHAPTERTWO

2.0EXAMINATIONOF THEAUDITORGENERALREPORTFORNATIONAL HUMANITARIANFUNDFORTHEFINANANCIALYEARS2020/2021AND 2021/2022

• Mr. Mr.Raymond Omollo, the Principal Secretary Internal Security and National Administration appeared before the Committee on Thursday 7th March 2024 to adduce evidenceontheauditedfinancialstatementsfor theNationalHumanitarianFundfor the Financial Years 2020/2021 and 2021 /2022. During the meeting, the Accounting Officer was accompaniedby:

1. Ms. Anne Ngetich

• -Principal administrative secretary

2. Mr. Fred Muhul

• Deputy Accountant General

• 3.Mr. John Nyabwari

• -Senior Chief Finance Officer

• Mr. Keffa Onyiso

• Legal Counsel

• 5.Mr. Jamed Muigai

• -Head of Internal Audit

2.1 Examination of the Auditor General reports for National Humanitarian Fund for thefinancialyear2020/2021

1. Unsupported Payments to Internally Displaced Persons (IDPs)

• 2.As disclosed under Note 4 to the financial statements,the statement of receipts and payments for the year ended 30th June, 2021 reflects a total of kshs.116, 198,000.60 in respect of other grants and transfers and payments/expenses out of which payments amountingtoKshs.43,800,000weremadetovariousIDPsunder thecashpayment programmethroughEquityBank.

3. However, the payments were not supported with verifiable accounting documents including clearly authenticatedschedulesfrom thereceivingbank and acknowledgementsfrom the beneficiaries. Consequently, the validity and propriety of the disbursement of Kshs.43,800,000included in other grants and transfers and payments/expenses could not be confirmed.

Submissionby theAccounting Officer

TheAccountingOfficersubmittedthat

4. The Statement of Receipts and Payments for the year ended 30th June 2021 reflects a total of Kshs 116,198,000.60 in respect grants, transfers and payments/expenses as disclosed in Note 4 to the NHF financial statements. Out of which payments amounting to Kshs

43,800,000.00 were made to various IDPs under the cash payment programme through EquityBank.

• 5.In the Financial Year under review the fund made disbursements to various IDPs under cash payment programme amounting to Kshs. 43,800,000.00 through Equity Bank. The State Department secured verifiable and authenticated payment schedules from the bank andtheyare availablefor auditverification to support thedisbursement and has being Annexed in the submissions

Findings and observation of the committee

6.The Committee Observed that

• i. paymentsamountingtoKshs43,800,000.00weremadetovariousIDPs under the cashpayment programme through EquityBank.
• ii. Paymentsweresupportedwithverifiableaccounting documentsalthough not submitted at the time of audit.
• ili. The matter is resolved.

5.Unsupported BankBalances

• 7.As disclosed under Note 5 to the financial statements,the statement of assets and liabilities as at 30th June, 2021 reflects a balance of Kshs.272,622,221.80 in respect of cash and cash equivalents.However, the unpaid list of IDPs to support the amount of Kshs.259,321 and Kshs.99,760 held in National Bank of Kenya and Equity Bank respectively and all amounting toKshs.359,081was not provided for auditverification.
• 8.Further, a review of the Fund's Bank statement for the account maintained at Equity Bank for the period between 01.07.2020 to 30.06.2021 showed the following unexplained transactions.
• i. RTGS State Department for Interior and Citizen Services Kshs.193,537,036.05 Credit on 26.02.2021 and Debit of the same amount on 19.03.2021.
• ii. RTGS State Department for Interior and Citizen Services Kshs.3,012,737.00 Crediton28.05.2021andDebitofthesame amountin25.06.2021

In the circumstances, the validity and completeness of the cash and cash equivalent of Kshs.272,622,221.80 as at 30th June, 2021 could not be confirmed.

Submissionby theAccounting Officer

• 9.The Accounting Officer submitted that—

The State Department requested the National Bank of Kenya to give an account of funds held in theNHFaccount of Kshs 259,321 and the same is availablefor auditverification. Annex 2 of the submitted document.Similarly,upon request by the State Department, EquityBank gave an account statement and clarifications to support the balance of Kshs. 99,760.This amount is deemed tobe unclaimed amount for twoIDPs and the bank statementisavailableforauditverification.Annex3ofthesubmitteddocument.

10. For the RTGS amount of Kshs. 193,537,036.05 credited by Equity Bank on 26.02.2021 and a Debit of the same amount on 19.03.2021.The bank clarified that the amount was meant for payroll requestfrom theMinistry done on 2ndFebruary 2021whichwas credited to the accounterroneouslyhencenecessitating a reversal after theMinistryclarified that thefunds were meant tocover the payroll.For the RTGSofKshs.3,012,737.00Creditedon 28.05.2021 and a Debit of the same amount on 25.06.2021.The Bank clarified that the Central Bank of Kenya recalled the funds with "SET I ERROR" reason, which necessitated thereversal.Annex3ofthesubmitteddocument.

Observationofthecommittee

• 11.The Committeeobserved that
• i) An amount of Kshs.259,321 and Kshs.99,760 washeld inNational Bank of Kenya and Equity Bank respectively
• i) The National Bank of Kenya was yet to give an account of funds held in the NHF account of Kshs 259,321 while Kshs.99,760 that was held in Equity Bankwasdeemed tobeunclaimed amountfortwoIDPs.
• ii) The RTGS amount of Kshs.193,537,036.05 was meant for payroll request from the Ministry necessitating a reversal after the Ministry clarified that the funds were meant to cover the payroll.
• iv) The RTGS amount of Kshs.3,012,737.00 was recalled by Central Bank of
• V) Thematter is resolved.

6.Non-FunctioningFund Committee

12. As reported in the previous year, although the Prevention. Protection and Assistance to Internally Displaced Persons and Affected Communities Act, 2012 prescribes the Fund Administration procedures including the composition and functions of the Commitee and Secretariat,there was no evidence in form of minutes toindicate that the Committee deliberated onthemattersoftheFund and directed its administrationin theyearunder audit as provided for under the Act. Further, no evidence was provided of an active Secretariat as provided for in the enabling Act. In the circumstances, the adequacy and effectiveness or otherwise of risk management and oversight on the Fund could not be confirmed.

SubmissionbytheAccountingOfficer

13. The Accounting Officer submitted the following; 2. The Fund did not make any disbursements or any payments to the IDP'S In the Financial have been forwarded to the banks for payment, thus, there are no minutes to indicate that 3. Year under review.No more funds have been disbursed and nonew payment schedules theCommitteedeliberated onmattersoftheFund. 4. 14.It was only issues that required clarifications that were referred back to the Committee through the Secretariat but wherebeneficiaries' details were correct, nofurther

communicationwasrequired.TheCommitteewasconstituted on9thDecember,2014for a period of 3 years. Upon expiry of its tenure, the Internally Displaced Persons (IDPs) camps hadbeen closed with most of theIDP's havingbeenintegrated back to the society.

Findingsandobservationofthecommittee

• 15.TheCommitteeobserved that--
• i.TheFund doesnothave afunctional Committeesinceits three-year tenure cxpired in 2017.Consequently,no funds can be disbursed or payment schedules can be prepared due to the absence of a functional committee
• ii.Although most of the Internally Displaced Persons (IDPs) had been been integratedback to thesociety,IDPs campswereclosed atthe expiryof three yearsofthecommitteebefore allIDPswerecompensated
• ili. The matter is unresolved.

RecommendationsoftheCommittee

• 16.TheCommitteerecommendsthat

Within six months upon the adoption of this report, the cabinet secretary for MinistryofinteriorandNationalAdministrationShouldreconstitutea functional nationalconsultativecoordinationcommitteeonIDPS towindupissuesrelated to the fund.

2.2 Examination of the Auditor General reports for National Humanitarian Fund for the financial years 2021/2022

1.DormantBankAccounts

• 17.Review of recordsprovidedfor auditindicated that theFund operated four commercial bank accounts and one account at CentralBankwhichwere establishedfor thepurpose of disbursing grants to Internally Displaced Persons (IDPs) under the cash payment programme. Review of the bank statements revealed that the bank accounts have been dormant for over two years with a balance of Kshs.272,621,261.00 as at 30th June, 2022 despite the conclusionof disbursement ofgrantstoIDPs under thecash payment programme.

18. This is contravention of the provision of Section 16 (2) of the prevention, and protection Assistance toInternallyDisplaced Persons and Affected CoII1 111 unities Act 2012which provides that Accounting Officer may, with the approval of the Cabinet Secretary for the time beingresponsibleforfinance,invest or place on a deposit interest earning account any of themoneys of thefund and anyinterest earned on moneys soinvested or deposited shall be placed to the credit of the Fund.In the circumstances,the effective use of the Fund's resources couldnotbe confirmed.

Submission by theAccounting Officer

• 19.TheAccounting Officer submitted that—

Sec16(2) of the prevention,protection and assistance to internally displaced persons and affected communities Act, 2012 provides that the Accounting Officer may,with the approval of the Cabinet Secretary for the time responsible for Finance, invest or place on a deposit account any of the money of the Fund and any interest earned on money so invested or depositedshallbeplacedto thecreditoftheFund.Itis alsotruethat at the time of the audit thebank accounts were dormant andwereholding idlefunds despite provision in the Act and completion of disbursement of grants toIDPs.

20.The bank accounts, their bank balances and status were as detailed below:

| S/NO | BANK | A/C NO. | BALANCEASAT30.06.22 | |--------|--------------------------|----------------|-----------------------| | 1 | Central Bank of Kenya | 1000311339 | 271,250,155.00 | | 2 | Co-operativeBank ofKenya | 01141010160000 | 12,985.00 | | 3 | Kenya Commercial Bank | 1145110983 | 0.00 | | 4 | National Bank of Kenya | 01001033074100 | 258,121.00 | | 5 | Equity Bank | 0020261438740 | 100,000.00 |

21. There are modalities in considering investing or placing the funds in an interest earning account as recommended by the section 16(2) of the Act.As a prerequisite,section 16(1) provides that the Fund shall be administered by the Accounting Officer under the general

direction of the Committee.Notably,the National Consultative Coordination Committee on Intcrnally Displaced Persons established under section 12 of theAct is not in place hence impairing the decision on modalities of investing or placing on a deposit account any of the moneyoftheFundthathavebeendormantinthebankaccounts.

• 22.TheStateDepartment hasmade follow-ups on the outstandingbalances held by the Commcrcial banks and advised them to remit the outstanding balances to CBK National HumanitarianfundAccount forfurther action.All the commercial bank accounts havesince been closed and balances transferred to CBK account as per the attached CBK,CooperativeBankandNationalBankStatements.
• 23.It is notable thatNationalHumanitarianFundwasformedunder theAct ofParliament and only the same can wind it up, thus explaining the infinite life of the Fund. There are modalitics and legal issues involved in the closure or winding up of such a fund.

Observationsofthecommittee

• 24.TheCommitteeobserved that-
• i.Atthetime of the auditfourbankaccountswere dormantandwereholding idlefunds despiteprovisionin theActand completion of disbursementof grants toIDPs.
• ii.All the commercialbank accounts have sincebeen closed and balances transferred to CBK account,theFunds Couldn'tbeinvested dueto thelack ofaFunctioning Committee.
• iii. The Matter is unresolved.

RecommendationsoftheCommittee

25.The Committee recommends that:

Within six months upon the adoption of this report, the cabinet secretary for MinistryofinteriorandNationalAdministrationShouldreconstitutea functional national consultative coordination committee onIDPS to wind up issuesrelated to the fund.

REPORTONEFFECTIVENESSOFINTERNALCONTROLS,RISKMANAGEMENTAND GOVERNANCE

2.Non-FunctioningFund Committee

26. As reported in the previous year, although the Prevention. Protection and Assistance to InternallyDisplacedPersonsandAffected CommunitiesAct,2012prescribes theFund Administration procedures including the composition and functions of the Committee and Secretariat,there was no evidence in form of minutes to indicate that the Committee deliberated on thematters of theFund anddirectedits administration in theyearunder audit

27. The Accounting Officer submitted that

The Fund did not make any disbursements or any payments to the IDP'S In the Financial Year under review No more funds have been disbursed and no new payment schedules have been forwarded to the banks for payment, thus, there are no minutes to indicate that the Committee deliberated on matters of the Fund. It was only issues that required clarifications thatwerereferredbackto the Committee through theSecretariatbutwhere beneficiaries' details were correct,nofurther communication was required.The Committee was constituted on 9th December, 2014 for a period of3 years. Upon expiry of its tenure, the Internally Displaced Persons (IDPs) camps had been closed with most of the IDPs having been integrated back to the society.

Findingsand observationof the committee

28.The Committeeobserved that

• The Fund did not have a functional Committee since its three-year tenure expired in 2017, resulting in no funds being disbursed and no payment schedules being prepared duetothe absenceofafunctional committee
• ii. Although most of the Internally Displaced Persons (IDPs) camps had been been integrated back to the society the IDP camps were closed at the expiry of three years of the committee before all IDPs were compensated
• ili. Thematterisunresolved.

Recommendationsofthe Committee

29.TheCommitteerecommendsthat

Within six months upon the adoption of this report the cabinet secretary for Ministry of interior and National Administration Should reconstitute a functional national consultative coordination committee on IDPS to wind up issues related to the fund.

Signature

HON.FATUMAZAINABMOHAMMED,M.P. CHAIRPERSON,SPECIALFUNDSACCOUNTSCOMMITTEE

2110412s

Date:

MINUTES OF THE 1OTH SITTING OF SPECIAL FUNDACCOUNTS COMMITTEE ROOM ON THE 2ND FLOOR AT 12.00 N00N.

PRESENT

• 1.Hon.FatumaZainabMohammed,MP-Chairperson

2. Hon.Dawood Abdul Rahim,HSC,MP-Vice Chairperson 3. Hon. Eve Akinyi Obara, MP 4. Hon. Charles Ngusya Nguna, MP 5. Hon.Erastus Kivasu Nzioka, MP 6. Hon. Dr. Christine Ombaka Oduor, MP 7. Hon. Tom Mboya Odege, MP 8. Hon. Catherine Nakhabi Omanyo, MP

• 9.Hon. Cecilia Asinyen Ngitit, MP

10. Hon. Joshua Odongo Oron, MP 11. Hon. Kahugu Erick Mwangi, MP 12. Hon. Paul Kibichi Biego, MP

APOLOGIES

• 1.Hon. Faith Wairimu Gitau, MP

2. Hon. Joseph Majimbo Kalasinga, MP

• 3.Hon. Joseph Kimutai Cherorot, MP

INATTENDANCE

NATIONALHUMANITARIANFUND

1. Mr. Raymond Omollo -Principal SecretaryInternalSecurityand National Administration

2. Ms. Anne Ngetich

-Principal administrative secretary

3. Mr. John Nyabwari

• Senior Chief Finance Officer

4. Mr. Keffa Onyiso

• Legal Counsel

5. Mr.Fred Muhul

• Deputy Accountant General

6. Mr. Stanely Mutua

• Liaison Officer Interior

• 7.Mr. Jamed Muigai

-Head of Internal Audit

OFFICEOFTHEAUDITOR-GENERAL

• 1.Mr. David Osiemo

liaison Officer

2. Mr. Richard Nyachio

Director Audit

3. Mr. Josephat Muthusi

SeniorAuditor

NATIONALASSEMBLYSECRETARIAT

• 1.Mr. Erick Nyambati

• Ag Senior Clerk Assistant

2. Ms. Comfort Achieng

• ClerkAssistantIII

• 3.Mr. Nimrod Mate

• Clerk Assistant III

• 4.M. lit: Kanyoko

• Legal Counsel II

• 5.M:. rickKathurima

• MediaRelationsOfficer

• 6.Ms.. line Sifuma

• Hansard Reporter III

• 7.Mr.ter Mutethia

• Hansard Audio officer

• 8.Mr.bdilatahMahat

• Attachee

MIN.N/AA&GPC-SFAC/2024/030: PRELIMINARIES

The Chai: pcrson called the meeting to order at 10.01am, followed by a word of prayer and introductions. The following agenda was adopted as circulated:

• 1.Prayers
• 2.Picliminaries/Introductions

3. Examination of the Auditor General Reports on Accounts of the National ! anitarianFundfortheFinancialYears2020/2021and2021/2022. 4. Other Business 5. Adjournment Date of thenextmeeting.

The Principal Secretary State Department Internal Security and National Administration and the Accounting Officerfor theNational HumanitarianFund undertook oathofwitness.He tabled the manatgeinent responses and supporting documents on the audited accounts of National Humanitarian Fund for the financial years 2020/2021 and 2021/2022.

MIN.NA/AA&GPC-SFAC/2024/031:

CONSIDERATIONOFTHEAUDITREPORTSOF

THENATIONALHUMANITATIANFUNDFORTHE FINANCIALYEARS2020/2021AND2021/2022

Briefonthiemandateand scope of theFund

The Accounting officer briefed the Committee on the operations of National Humanitarian Fund for the financial years 2020/2021 and 2021/2022.

Examinationof the AuditorGeneral reports forNational HumanitarianFund for the financialycars2020/2021 and2021/2022.

The Committec examined the Auditor General's report for the National Humanitarian Fund for the financial ycars 2020/2021 and 2021/2022 as follows:

1. Unsupported Payments to Internally Displaced Persons (IPDs)

As disclosed under Note 4 to the financial statements, the statement of receipts and payments for the year ended 30th June, 2021 reflects a total of kshs.116, 198,000.60 in respect of other grants and transfers and payments/expenses out of which payments amounting to Kshs.43,800,000 were made to various IDPs under the cash payment programme through Equity Bank. However, the payments were not supported with verifiable accounting documents including clearly authenticated schedules from the receiving bank and acknowledgements from the beneficiaries.

Consequently, the validity and propriety of the disbursement of Kshs.43,800,000 included in other grants and transfers and payments/expenses could not be confirmed.

Submission by the Accounting Officer

TheAccounting Officer submitted asfollows;

The Statement of Receipts and Payments for the year ended 30th June 2021 reflects a total of Kshs 116,198,000.60 in respect grants, transfers and payments/expenses as disclosed in Note 4 to the NHFfinancial statements.Out of whichpayments amounting toKshs 43,800,000.00were

In the FinancialYear under review the fund made disbursements tovariousIDPs under cash payment programme amounting toKshs. 43,800,000.00 through Equity Bank.

The State Department secured verifiable and authenticated payment schedules from the bank and they are availablefor auditverification to support thedisbursement.Annex1 of the documents submitted

Findings andobservationof thecommittee

TheCommitteeObserved that;

• i. Authenticity and accuracy of payment schedules provided would not be ascertained since somepeoplepaidwereindicated as originatingfrom three Counties raising concerns on whether thelistprovidedwasgenuine and accurate.
• ii. Thelistprovidedwasnot atruereflectionoftheexpectedIDPS
• iii. Money was disbursed to IDPS in July 2020 yet at the time, there was no functional Committee tasked to do so.
• iv. Other IDPS remained uncompensated or unsettled
• V. The matter remained unresolved

2.Unsupported BankBalances

As disclosed under Note5 to thefinancial statements,the statement of assets and liabilities as at 30th June, 2021 reflects a balance of Kshs.272,622,22 1.80 in respect of cash and cash equivalents. However, the unpaid list of IDPs to support the amount of Kshs. 259,321 and Kshs.99,760 held in National Bank of Kenya and Equity Bank respectively and all amouinting to Kshs.359,081 was not provided for audit verification.

Further,a review of theFund'sBank statementfor the account maintained at EquityBankfor the period between 01.07.2020 to30.06.2021 showed the following unexplained transactions.

• i. RTGS State Department for Interior and Citizen Services Kshs.193,537,036.05 Credit on 26.02.2021 and Debit of the same amount on 19.03.2021.
• ii. RTGS State Department for Interior and Citizen Services Kshs.3,012,737.00 Credit on 28.05.2021 andDebitofthesame amountin25.06.2021

In the circumstances, the validity and completeness of the cash and cash equivalent ofKshs.272,622,221.80 as at 30th June, 2021 could not be confirmed.

Submissionby theAccounting Officer

The Accounting Officer submitted thefollowing;

The Staiv Icpartment requested the National Bank of Kenya to give an account of funds held in theNlliccunt of Kshs259,321and the same is available for auditverification.Annex2ofthe submitl ocument

Similarl.. ;on request by the State Department, Equity Bank gave an account statement and clarific lo support the balance of Kshs.99,760.This amount is deemed to be unclaimed amounit::IvoIDPs and thebank statement is availablefor auditverification.Annex3 of the submitt: cument

For the i1(i amount of Kshs. 193,537,036.05 credited by Equity Bank on 26.02.2021 and a Debit of the same amount on 19.03.2021. The bank clarified that the amount was meant for payroll rcqucst from the Ministry done on 2nd February 2021 which was credited to the account erroneo..lyhcncenecessitating areversal after theMinistryclarified that thefundsweremeant to covcr l.c payroll.For the RTGS ofKshs.3,012,737.00 Credited on 28.05.2021 and a Debit of the same aount on 25.06.2021.TheBank clarified that the Central Bank of Kenya recalled the funds with "SE T I ERROR" reason, which necessitated the reversal. Annex 3 of the submitted document.

Findingsaudobservationofthecommittee

The Conimillce observed that;

• i) Thefundwas dormantfrom2017as theCommittee's tenurewasfor3years only thus theFund did not have a Functional Committee leading to the Funds not beingutilized.
• i) Somc of theInternallyDisplaced Parsons's were not paid by the time the Ccmmittee's tenure had come to an end and the Accounting Officer had initiated an cngagementwiththeExecutivetoguideonthematter

3. iii) lhc exact time Kshs.272,622,22 1.80 was transferred tocentral bank and who authorizedthesamewouldnotbeestablished. 4. iv) ApprovalsofdebitingtheFundsaccount ontheRTGSamountscredited toits accountwasnotexplained 5. V T'hematterremained unresolved.

2.Non-FunctioningFund Committee

As reportcd in the previous year, although the Prevention. Protection and Assistance to Internally Displaccd Pcrsons and Affected Communities Act, 2012 prescribes the Fund Administration proceduresincludingthecompositionandfunctionsofthe CommitteeandSecretariat,therewas no evidcnceinformofminutestoindicatethat theCommitteedeliberatedon themattersofthe Fund and dirccted its administration in the year under audit as provided for under the Act. Further, lio cvicdcnce wasprovided of an activeSecretariat as providedforin the enabling Act.

In the circumstances,the adequacy and effectiveness or otherwise of risk management and oversightontheFundcouldnotbeconfirmed.

Submission by the Accounting Officer

The Accounting Officer submitted the following;

The Fund did not make any disbursements or any payments to the IDP'S In the Financial Year under review. No more funds have been disbursed and no new payment schedules have been forwarded to the banks for payment, thus, there are no minutes to indicate that the Committee deliberated on matters of the Fund. It was only issues that required clarifications that were referredbacktotheCommitteethroughtheSecretariatbutwherebeneficiaries'detailswere correct,nofurther communication was required.The Committee was constituted on 9th December, 2014 for a period of 3 years. Upon expiry of its tenure, the Internally Displaced Persons(IDPs) camps had been closed with most of theIDP's having been integrated back to the society.

Findings and observation of the committee

TheCommitteeobservedthat;

• i. There was no evidence attached in form of minutes toindicate that,the Committee deliberatedonmattersoftheFund.
• ii. TheFunddid nothave afunctional Committee since its tenure of threeyears had expired intheyear 2017,but thecommitteenotedwith concernthatfinancial transactionswere carried out during the period under review.
• iii. Thematterremainedunresolved

TheCommitteedirectedthat

• a)The Accounting Officer provides thefollowingwith seven days;
• i.A list of all confirmed Internally Displaced Person's(IDPS) highlighting those who have been paid, when they were paid and those who not paid.
• ii. Status report with supportive evidence on laid plans of compensating the remaining IDPS.
• ii. The Fund's certified Bank Statements for January to 30th June,2021of Equity and National bank.
• iv. Bank certificatesfrombothbanks as at 30th June 2021.
• V. Correspondences betweenCentralBank of Kenya and Ministryof interior and Coordination of National Government regardingfollowing transactions;
• a)RTGS State Department for Interior and Citizen ServicesKshs.193,537,036.05 Credit on 26.02.2021 and Debit of the same amount on 19.03.2021.
• b) RTGS State Department for Interior and Citizen Services Kshs.3,012,737.00 Credit on 28.05.2021 and Debit of thesame amount on 25.06.2021
• vi.A written submission on when the funds were transferred toCentralbank with supporting evidence.

MIN.NA/AA&GPC-SFAC/2024/032:

ADJOURNMENT/DATEOFNEXTMEETING

There being no other business, the meeting was adjourned at 2.15 p.m. The next meeting will be held on Tuesday 12th March 2024.

H 1%105

SIGNED.....

.DATE.

HON.FATUMAZAINABMOHAMMED,MP

(CHAIRPERSON) SPECIALFUNDSACCOUNTSCOMMITTEE

THIRTEENTHPARLIAMENT-SECONDSESSION THENATIONALASSEMBLY SPECIALFUNDSACCOUNTSCOMMITTEE.

ADOPTION LIST FOR THE REPORTONAUDITEDFINANCIALSTATEMENTSFOR THE:

National Humanitarian Fund

2020/2021and2021/22

| NO. | NAME | SIGNATURE | |-------|----------------------------------------------------|-------------| | 1. | Hon.Fatuma ZainabMohammed,MP-Chairperson | ?K | | 2. | Hon. Dawood Abdul Rahim, HSC, MP -Vice-Chairperson | | | 3. | Hon. Otucho Mary Emaase Mp | | | 4. | Hon. Charles Ngusya Nguna, MP | | | 5. | Hon.Dr.Christine Ombaka Oduor,MP | | | 6. | Hon.Erastus Kivasu Nzioka,MP | | | 7. | Hon. Eve Akinyi Obara, MP | | | 8. | Hon. Joseph Majimbo Kalasinga, MP | | | 9. | Hon. Tom Mboya Odege, MP | | | 10. | Hon.CatherineNakhabi Omanyo,MP | | | 11. | Hon. Cecilia Asinyen Ngitit, MP | | | 12. | Hon. Erick Kahugu Mwangi MP | | | 13. | Hon. Joseph Kimutai Cherorot, MP | | | 14. | Hon. Paul Biego Kibichy, MP | | | 15. | Hon.Onchoke Charles Mamwacha, MP | |