Federations unable to account for KSh3.9 billion from Sports Fund – Auditor General

Accounting Officers are in breach of Section 62 of the Public Audit Act, 2015 by failing to adequately prepare for audit which is exhibited by numerous inaccuracies in financial statements presented for audit, lack of requisite supporting documents, several revisions of financial statements and, in some cases, reluctance to cooperate with the auditors during the audit process
Officials of sports federations pose for a photo with Sports, Arts and Social Development Fund officers after a sport’s stakeholders forum on 29 January 2024 in Nairobi. PHOTO/COURTESY

Sports federations have failed to account for KSh3.9 billion of public funds disbursed to them through the Sports, Arts and Social Development Fund, according to the most recent audited government books by Auditor General Nancy Gathungu.

The amount accounts for a staggering 36.79% of the KSh10.6 billion that was released for promotion and development of sports.

In the report covering the financial year ending 30 June 2022, Auditor General Nancy Gathungu also raises questions over irregular disbursements to the Athletics World Under-20 Championships organizing committee, amounting to KSh1.36 billion, primarily due to unjustified procurement methods.

“[…] Review of the procurement documents revealed that procurement of goods, works and services were conducted through restricted tender method. No explanation was provided to justify the choice of the restricted procurement method as required by Section 102(1) of the Public Procurement and Asset Disposal Act, 2015,” reads the report.

“In the circumstances, Management was in breach of the law.”

The Fund’s total expenditure for the year in review was KSh.14 billion, KSh.10.6 of which went into sports activities.

“In the circumstances, the regularity, accuracy and completeness of promotion and development of sports returns amounting to KSh.10,605,595,467 could not be confirmed,” concludes Gathungu in her qualified opinion.

Breach of law

Ms. Gathungu also indicts the Fund on a number of areas some of which have since been addressed, including the lack of a substantive Chief Executive Officer and irregularity in the appointment of the chairman of the board of directors. Other concerns were weak corporate governance structures and lack of internal audit systems, all of which flout the law.

At the time of audit, the board of the Fund was headed by General (Retired) Jackson Tuwei, the Athletics Kenya boss, appointed by the Head of Public Service contrary to Regulation 8(3)(4) of the Public Finance Management (Sports, Arts and Social Development Fund) Regulations, 2018, which require board members to be appointed the Cabinet Secretary, one of whom will be designated chairman by the Head of State. 

“Further, the Oversight Board passed resolutions affecting the operations of the Fund during four (4) different Board meetings attended by three (3) Board Members contrary to Regulation 8(8) of the Public Finance Management (Sports, Arts and Social Development Fund) Regulations, 2018 which states that the quorum for the conduct of meetings of the Board shall be four members. In addition, five (5) Oversight Board minutes for the meetings held during the year were not signed.

“In the circumstances, Management was in breach of the law and the efficiency and  effectiveness of governance systems could not be confirmed.”

The Fund has since appointed a substantive CEO in Nuh Mohammed, while President William Ruto regularized General Tuwei’s position as chairman through a gazette notice effective 18 November 2022 for a period of three years. Mr Mohammed was appointed in August 2023.

Tuwei is cited for KSh. 70,000 allowances he received for chairing board meetings at a time when his appointment to the position was irregular, while the board management is indicted for a number of procedural flaws in submitting the audit returns. 

Subsequent disbursements

“Management was in breach of the law. In the circumstances, the financial statements do not comply with the financial reporting guidelines issued by the Public Sector Accounting Standards Board.”

Kenyans must question why and how, in spite of their failure to account for the billions of taxpayers money, the federations have continued to receive funding from public coffers through the Fund.

“The Fund continued to disburse money to sports organizations that had not accounted for previous moneys contrary to the provisions of Regulation 15(5) of the Public Finance Management (Sports, Arts and Social Development) Regulations, 2018 which provides that a recipient who fails to comply with Paragraph (2)(3) shall not be eligible for any subsequent disbursement until full compliance.”

There is no public information or data available to show which sports federations had received the yet-to-be-accounted for monies but a source tells Kurunzi News that football, athletics, rugby and volleyball are the greatest beneficiaries of the irregular disbursements. 

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