A major financial scandal within the National Treasury has been exposed after the High Court ruled that two officials refund Ksh39.1 million acquired unlawfully through allowances and perks.

The officials based the unlawful allowances on outdated and revoked government circulars. Government circulars play a crucial role in specifying which allowances are permitted and which are not.

Issued by the National Treasury and the Salaries and Remuneration Commission (SRC), the circulars provide guidelines, approvals, and restrictions on payments to public officials. The two officials allegedly used outdated and revoked circulars to circumvent proper procedures and receive additional perks.

They also used unauthorised and duplicated circulars to enrich themselves.

A section of the EACC Headquarters Integrity Centre in Nairobi County

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EACC

According to the Ethics and Anti-Corruption Commission (EACC), the officials meandered their way into pocketing the millions after receiving multiple and overlapping allowances without proper approval from the SRC.

The High Court ruled that the amount recovered by EACC be returned in full.

The judgment, delivered on Thursday, June 4, by Lady Justice Lucy Mwihaki of the Anti-Corruption and Economic Crimes Division of the High Court in Nairobi, found that the two officials, a male and a female, pocketed large sums disguised as task force, extraneous, entertainment, and facilitation allowances, all of which were unauthorised.

The male official was ordered to refund Ksh20,318,000, with Ksh11,078,601 already frozen in his bank account, while the remainder (Ksh9,239,398.17) is to be paid in cash.

Similarly, the female official was directed to return Ksh18,862,000, including Ksh8,953,988.74 frozen in her bank account, with Ksh9,908,011.26 to be settled in cash.

The matter came to light in July 2022 when EACC received multiple complaints of misappropriation of public funds at the National Treasury.

"Investigations revealed that between January 2020 and June 2022, the two officials received multiple and overlapping allowances without proper approval from the Salaries and Remuneration Commission (SRC)," the statement by EACC read in part.

The court found that the two officials went against the SRC advisories, which are binding under Article 230 of the Constitution, and found them guilty of knowingly engaging in the fraudulent scheme, unjustly enriching themselves at the expense of taxpayers' money.

The anti-graft sleuths have hailed the move, terming it a major step in their efforts to recover stolen public funds and enforce accountability in the use of public resources.

A photo of the statue outside the Nairobi Law Courts

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Judiciary