Cancer institute on the spot over spent allowances

National Cancer Institute (NCI) is on the spot over unsupported expenditure amounting to millions of shillings, a new report shows.

The latest report from the  Auditor General Nancy Gathungu, also raises questions over how the management and the board have been running the affairs of the institute after it emerged that in some instances the board held excess board meetings from which  they paid themselves allowances while in others they failed to provide minutes to proof that meetings were held.

Among the irregularities un-earthed in the report include anomalies in financial statements, unsupported expenses, unsupported revenue, unsupported travel, unsupported bank balances, unsupported accommodation and daily subsistence allowances, undisclosed outstanding imprest as well as having Multiple lmprests

Others are failure to withhold and remit tax to Kenya Revenue Authority (KRA), long outstanding audit fees, excess board of trustees composition, failure to prepare annual work plan, long outstanding work plan as well as budget imbalance.

Reads the report: “ln my opinion, because of the significance of the matters discussed in the Basis for Adverse Opinion section of my report, the financial statements do not present fairly, in all material respects, the financial position of National Cancer institute of Kenya as at 30 June, 2023 and of its financial performance and its cash flows for the year then ended, in accordance with international Public Sector Accounting Standards (Accrual Basis) and do not comply with the Cancer Prevention and Control Act No.15 of 2012 and the Public Finance Management Act, 2012.”

On unsupported expenses the report shows that the institute could not account for Sh33.4 million that was spent on seven items. While the financial statements show that the institute spent Sh161.7 million, the schedules provided only showed that Sh75 million was spent resulting in a variance of Sh33.4 million. The money was spent on various items including advertising, conference and delegations, bank charges, printing and stationery, Cancer Education Material, training, travel accommodation and daily subsistence allowances.

With regards to anomalies in the financial statements, the report shows that the chairman’s statement and implementation status of the Auditor General’s recommendation are not signed and dated.

Reads the report: “ln the circumstances, the financial statements presented for audit did not comply with reporting template prescribed by the Public Sector Accounting Standards Board.”

The report also reveals that the institute has unsupported Travel Accommodation and daily subsistence allowances amounting to Sh24.4 million out of Sh80.9 million that was spent on the said vote as it was not supported with payments vouchers and their respective supporting documents.

Reads the report: “In the circumstances, accuracy and completeness of travel accommodation and daily subsistence allowances amount of Sh24,468,072 could not be confirmed.”

With regards to unsupported revenue, the report shows that while the statement of financial performance showed public contributions and donations of Sh29.6 million and rendering of services of Sh9.8 million, the said amounts were not supported by schedules while on unsupported bank balances, the report shows that a balance of Sh16.9 million in the current account was not supported by cashbook, certificate of bank balance and bank reconciliation statements.

On imprests, the report shows that there was undisclosed imprest of Sh8.1 million adding that a review of imprest records revealed that seven staff held multiple imprests amounting to Sh8.1 million.

This, the report says is contrary to Regulation 93(4) of the Public Finance Management (National Government) Regulations, 2015 which states that before issuing temporary imprests under, the Accounting Officer shall ensure that the applicant has no outstanding imprests Adds the report: “ln the circumstances, Management was in breach of the law.”

With regards to the composition of the board, the report shows that while the expenses amounted to Sh9.98 million this was an increase of Sh8.9 million as in 2022 the expenses were only Sh1 million.

The increase in expenses the report says is because the board held seven full board meetings, seven finance and strategy committee meetings and seven technical committee meetings which surpassed the maximum number of meetings allowed without approval from the Cabinet Secretary.

The human resources committee and audit committee held only three and two meetings respectively, which was contrary to Head of the Public Service Circular the board meetings shall be restricted to a minimum of four as provided in the state corporations Act and capped at a maximum of six for each financial year or as may be specified in the respective enabling legal instruments.

ln addition, the report reveals that a review of the of board records showed that the institute had 10 board members, a move that was contrary to chapter 1(1.1.3) of the Mwongozo code of governance which requires board membership of all state corporations to have between seven and nine members.