MPs probe suspected fraud in Sh4bn maize subsidy
Millers who supplied maize flour under the Sh4 billion subsidy programme have until Friday to provide proof before a parliamentary committee or risk being surcharged.
The National Assembly Committee on Agriculture and Livestock in a meeting with a section of millers said on Wednesday failure to provide evidence that they supplied the market with the subsidised flour, will force them to recommend that they be surcharged.
The Tigania West John Mutunga-chaired committee also warned millers who have not been paid, that they risk not being paid if they fail to provide certified copies of documents indicating that they supplied the flour.
Among the conditions the committee wants the millers to satisfy is the provision of the daily purchases of the flour by various outlets, quantities they released to the market as verified by the multi-agency team, and proof of payment of taxes.
The millers that have already been paid will be forced to demonstrate that what went to their bank accounts is equivalent to the amount of flour they supplied.
The information must tally with that provided to Parliament by the Central Bank of Kenya (CBK).
“This committee will look at the input and output of each miller and compare it with what has been provided by CBK. The government’s position is that they are paying. Those who have been paid will be forced to return the money and we are here to verify that you supplied the flour,” said Mr Mutunga.
“The information must balance because we are investigating fraud. The government could have spent Sh4 billion on something that was not there.”
The committee reviewing the transactions in the subsidy programme issued the tough conditions after some of the millers not allied to the Cereal Millers Association (CMA) appeared before the MPs but were turned away for failing to have the basic information required.
Among the anomalies the MPs pointed out in the documents provided by the millers include a lack of quantities supplied, outlets they supplied, a lack of approval and recipient notes by the multi-agency team in the outlets the flour was supplied to.
Some of the millers that faced MPs on Wednesday include Belt Association, Karibu Millers, Laser Solutions Limited, Roy Millers and Abyssinia Millers.
“Let us be serious and provide all the information to this committee by Friday because it will be used by the government to pay you or not. Some of these documents are not signed and, therefore, cannot be adopted by the committee,” said Mr Mutunga.
The MPs said while some flour left the stores of the millers, it could not be confirmed whether they reached the market or were hoarded.
Soy MP David Kiplagat said without the verification of millers that their flour reached the intended consumers, there is no value for money spent on the programme.
In June, MPs slammed the brake on payment of the pending balance of Sh2.5 billion owed to the millers, citing “massive” anomalies.
The lawmakers said some millers pocketed millions from the taxpayers despite not having an Integrated Financial Management Information System and invoice numbers.
The government rolled out the subsidy programme for four weeks between July 19 and August 20, 2022, to curb the skyrocketing flour price.
During this period, consumers were buying a two-kilo packet of flour at Sh100 instead of the prevailing market price of Sh210.
The millers that signed contracts with the government for the subsidy programme were 129. Twenty-29 of the millers were CMA members.
The CMA members submitted 1,144 invoices. According to the National Cereals and Produce Board, 5,264,073 24-kilogramme bales of flour were supplied into the market during the maize subsidy programme at about of Sh6.6 billion, out of these, CMA member millers supplied 85,608,170 of flour worth Sh4, 495,356,547.
A special account was opened by the government and credited with Sh4 billion for the subsidy to be paid to millers and the rest was to be topped up based on the quantities disbursed into the market that were verified by the government officials that were stationed at every participating mill.
A multi-agency team dubbed the ‘command centre comprising the Ministry of Agriculture, Treasury, Kenya Revenue Authority (KRA), National Cereal and Produce Board (NCPB), Agriculture Food Authority (AFA) and the Ministry of Interior ran the operations during the one month period.
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