In Summary
  • The law obliges commercial banks to report all transactions of Sh1 million and above to the centre on a daily basis.

  • The audit, done last year, revealed sensational details of how crooks would abuse user access controls to fill Ifmis with fake contract documents and approvals.

  • The audit recounted how civil servants would log into Ifmis even on Saturdays when government offices are closed.

Full details on the latest investigations into how crooks siphoned out billions of shillings from the National Youth Service coffers are yet to come through.

I hope that the fresh investigations will go to the bottom of perennial scams at the NYS. Bringing in multiple agencies — including the National Intelligence Service, the Financial Reporting Centre and the Assets Recovery Agency — in the investigations is a good starting point.

I have always felt that one of the reasons high-profile investigations of the type under way at the NYS have not been successful is that we have not been taking full advantage of the information and statistics gathered regularly by that little-known entity called FRC.

The law obliges commercial banks to report all transactions of Sh1 million and above to the centre on a daily basis.

MONEY LAUNDERING

The former department of the Central Bank of Kenya, now an autonomous agency of the National Treasury, is your first port of call when investigating money laundering and any other suspicious transaction in the financial system.

Still, where these investigations are likely to come up with spectacular revelations is delving deeply into information that sits within the Integrated Financial Management System (Ifmis) — the ICT platform on which all public finances run.

The truth is, our ‘cowboys’ had mastered the game of exploiting loopholes within Ifmis to steal billions of shillings from the NYS. If you want to understand how these masters of deception play their game, your starting point must be a special audit by the Auditor-General.

FAKE CONTRACT DOCUMENTS

The audit, done last year, revealed sensational details of how crooks would abuse user access controls to fill Ifmis with fake contract documents and approvals. We saw how crafty civil servants accessed Ifmis from any location — even outside office hours.

The report also revealed that employees who had long left the NYS were still ‘accessing’ Ifmis and manipulating the information in the system — because it did not have transparent procedures of terminating user profiles.

Another major finding was that the companies that benefitted from the Ifmis-generated payments were mainly relatively new outfits with no internet presence, low turnover and with bank accounts that had zero balances before they received the money.

RECEIVING BILLIONS

Does it really surprise anyone that the companies involved in the new investigations are also nondescripts?

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