Youth Enterprise Development Fund – Call for Expressions of Interest to Develop Strategic Plan

The Youth Enterprise Development Fund (YEDF) is a project of Vision 2030 and provides loans and other enterprise development solution services to Kenyans aged 18 to 35 years.

Over the last five years, the Youth Fund has financed over 130,000 youth enterprises and supported thousands others through its business development services and through the jobs abroad programme.

Read more http://www.yipekenya.org/YEDF.htm

Kenya's Youth Fund Board resign

Sambili: Warios reinstatement is final

The standoff at Kenya’s Youth Fund does not serve the youth

On Wednesday 21st October 2009, the Minister of Youth Affairs and Sports, Hon. Prof. Hellen Sambili reinstated the Youth Enterprise Development Fund’s former CEO Mr. Umuro Wario, after a - yet to be made public - Kenya Anti Corruption Commission investigation report that cleared Mr. Wario of any criminal culpability in his activities prior to his suspension and subsequent termination by the Youth Fund’s Board.

In June 2009, the Partnership for Change released a report (published here on this blog) questioning the true reasons for Mr. Wario’s dismissal from the fund, in addition to queries concerning:

• Single sourcing of contracts prior to and during Mr. Wario’s tenure as CEO.
• The contentious partnership with Enablis East Africa, that Mr. Wario himself claimed was the main reason behind his termination, and
• The corporate governance structure of the Youth Fund's Board with regards to conflicts of interests among named members.

So far the Youth Fund’s Board has not deigned to acknowledge nor respond to the questions, despite the Partnership posing the queries not only in the mainstream media but in youth forums. As Yipe.org’s work is focused on the youth entrepreneurs, we too tried to ask questions when given the opportunity, only to be met with the response that our enquiries lacked any substance, and were based on fallacious reports.

As a result of the Fund's deafening silence, sadly we have become fully aware that the Youth Fund’s Board is only interested in retaining full and complete control over this most important national fund; so much so that the Board will go to any lengths (at whatever cost and detriment to its reaching the 3 million of unemployed youth that require it’s assistance) to ensure that Mr. Wario is not allowed back into the Fund’s secretariat.

To spend in the range of millions of precious Kenya shillings  to reiterate what has been roundly publicized on our television screens and radios to endear Kenyans to their point of view, has exposed the high handed attitude by the Youth Fund’s Board. Why run to the media now, when in June 2009 the Board fronted by the Chairperson disparaged the same media as being in cahoots with political enemies?

Nevertheless, the Youth Fund’s public statement and extract of the auditors investigation published on Wednesday October 28th, brings onto the fore further questions. 

On reading the two page - full colour advertisements* placed in yesterdays Daily Nation and Standard newspapers, it is indeed stupendous that the Kenya Anti Corruption Commission (KACC) exonerated Mr. Wario if the Commission’s investigators were aware of the damning evidence of the State Corporation Inspectorate’s office outlined in the published extract. Surely the KACC investigations would have involved interviewing the Fund’s staff and Board members in addition to the State Inspectorate?

The Youth Fund's Board has stated that it never referred Mr. Wario’s case to the KACC, though in their published statement released yesterday, Mr. Wario is guilty of a wide range of derelictions and/or omissions of duty that would have landed any other public officer in an interrogation room at Integrity House. Yet the Board was benevolent enough to not forward Mr. Wario’s case to the KACC even as they accused him of mismanagement of funds and assets.

Indeed the extract from the report by the Inspectorate of State Corporations confirms the Board’s allegations of gross violations that are in contravention of both the Anti-Corruption Economic Crimes Act 2003, as well as the Public Officers Ethics Act.

1.    The Anti-Corruption and Economic Crimes Act, 2003 (ACECA)

The Youth Fund by virtue of being a State Corporation is a public body as per the 2003 Act; and Mr. Wario by virtue of his employment at the Youth Enterprise Development Fund fell into the category of a public officer.

The Act defines corruption as including abuse of office or breach of trust. Mr. Wario’s disregard for financial and recruitment procedures (concern #4), attempted diversion of funds without adherence to due process (concern #6) and non-transparent use of financial resources (concern #8) would have surely made him culpable of being charged with corruption.

Furthermore, Mr. Wario’s acts regarding procurement outlined in the advertisement are in breach of the ACECA 2003 s. 45(2), which states that:

(2) An officer or person whose functions concern the administration, custody, management, receipt or use of any part of the public revenue or public property is guilty of an offence if the person —
 (b) wilfully or carelessly fails to comply with any law or applicable procedures and guidelines relating to the procurement, allocation, sale or disposal of property, tendering of contracts, management of funds or incurring of expenditures.

According to concern #5 of the extract from the report by the Inspectorate of State Corporations, Mr. Wario was guilty of flouting established procurement rules, and as such is liable under ACECA s. 45(2)(b).

2.     The Public Officer Ethics Act, 2003. (POEA)


Under the POEA 2003, Mr. Wario flouted s. 8 which states that:

8. A public officer shall, to the best of his ability, carry out his duties and ensure that the services that he provides are provided efficiently and honestly.

According to the published extract of the Inspectorate’s report, Mr. Wario was guilty of insubordination (concern #1), had a dismal performance in discharging his duties (concern #2) and lacked strategic direction and execution (concern #3).

This raises the following questions:

• Why did the YEDF Board not forward Mr. Wario’s case to the KACC seeing that in their paid advertisement they claim that he is responsible for the loss or mismanagement of tax payer funds? This points to the Board’s failure in stewardship of public funds and accountability not only to the Exchequer, but to all Kenyan taxpayers and most importantly to the nation’s youth entrepreneurs.
• The KACC should also answer how it found Mr. Wario not culpable in the face of the damning report by the Inspectorate of State Corporations. If the Commission was diligent in its duties, surely it would have discovered the report; or have they investigated the report and subsequently dismissed it?

However one cuts it, due process of the law must and should be followed. Instead of publishing expensive advertisements in the local dailies, the YEDF should press for Mr. Wario being charged and if guilty convicted under ACECA.

Justice can still be done. Under ACECA 2003, the YEDF can now forward their evidence to the KACC which stipulates penalties under  section 48:

48. (1) A person convicted of an offence under this Part shall be liable to —
(a) a fine not exceeding one million shillings, or to imprisonment for a term not exceeding ten years, or to both

Section 35(4) of the Act further allows the Board to pursue Mr. Wario even after they terminated his services, which is what any steward of public resources would have done.

Mr. Wario can only be judged in a court of law and not in the public court. To spend money that COULD and SHOULD have been used to empower young business people, only makes the Youth Fund look just like what they accuse Youth Minister Hellen Sambili of – acting with impunity!

Read the Youth Fund Board's statement

* A phone call to the Daily Nation this afternoon quoted Kshs. 437,000 per full colour full page. Advertisements were also placed in the Standard thus costing approximately 1.5 million shillings. Such a sum could have been invested at Kshs. 50,000 per venture in 30 youth owned enterprises

Umuro Wario back at the Youth Fund

So does this mean finally we get answers regarding the Fund's corporate governance?

Read "A Fish Rots From Its Head – Crony Capitalism Exposed At The Kenya Youth Enterprise Development Fund"

Kenya's youth fund wrangles continue

A Fish Rots From Its Head - Crony Capitalism Exposed At The Kenya Youth Enterprise Development Fund

“A fish rots from the head … down”
Crony Capitalism at the Kenya Youth Enterprise Development Fund

A Mars Group Kenya / Youth Interactive Portal for Enterprise (Yipe.org)

Report for

The Partnership for Change
From Dictatorial Impunity to Democratic Accountability in Kenya

June 27th 2009.

On June 23rd 2009, the East African Standard published an article by Kenneth Kwama outlining a

litany of accusations of financial mismanagement and impropriety at the Youth Fund. The Fund in

turn through its Chairperson, Ms. Hellen Tombo accused the Standard of being used in political

machinations, and looking for corruption where none exists.

The basis of the East African Standard story was a management letter by the Kenya National

Audit Office (KNAO) dated 28th November 2008 to the Chief Executive Officer of the Youth

Enterprise Development Fund. It is not known what was the response if any there has been to

this letter but the letter contains detailed audit queries which indicate significant managerial

problems at this important national fund. This matter is one of urgent national importance bearing

in mind Agenda 4 of the National Accord.

Though the MOYA confirmed it received an investigation report from the Inspectorate of State

Corporations they denied having lost any money. Minister Hellen Sambili said the Inspectorate’s

report makes several recommendations to strengthen the governance structures of the Youth

Enterprise Fund but makes no mention of "anything about the disappearance of money".

On June 26th 2009, the MOYA published a paid advertisement in the Daily Nation reiterating the

same. Since the Youth Fund’s press briefing, no other media mentions have emerged regarding

their response on the discrepancies outlined in the Kenya National Audit Office management

letter to the Youth Fund.

On June 23rd 2009, the East African Standard published an article by Kenneth Kwama outlining a litany of accusations of financial mismanagement and impropriety at the Youth Fund. The Fund in turn through its Chairperson, Ms. Hellen Tombo accused the Standard of being used in political machinations, and looking for corruption where none exists.

The basis of the East African Standard story was a management letter by the Kenya National Audit Office (KNAO) dated 28thNovember 2008 to the Chief Executive Officer of the Youth Enterprise Development Fund. It is not known what was the response if any there has been to this letter but the letter contains detailed audit queries which indicate significant managerial problems at this important national fund. This matter is one of urgent national importance bearing in mind Agenda 4 of the National Accord.

Though the MOYA confirmed it received an investigation report from the Inspectorate of State Corporations they denied having lost any money. Minister Hellen Sambili said the Inspectorate’s report makes several recommendations to strengthen the governance structures of the Youth Enterprise Fund but makes no mention of "anything about the disappearance of money".

On June 26th 2009, the MOYA published a paid advertisement in the Daily Nation reiterating the same. Since the Youth Fund’s press briefing, no other media mentions have emerged regarding their response on the discrepancies outlined in the Kenya National Audit Office management letter to the Youth Fund.

Why this issue is important

When the Youth Fund management was confronted with questions regarding the financial letter from the Kenya National Audit Office, instead of answering the queries they only politicised the issue. Further to that the public statement carried in the Daily Nation of Friday 26th 2009, do not in anyway answer the auditors question regarding its financial management.

The Youth Fund in this year’s Budget is set to receive a substantial amount of money from the Exchequer. Therefore, before they receive the Funds, it is imperative that they satisfy the Kenyan public and in particular its youth who form the majority ofKenya’s citizenry that it has rectified these discrepancies, and addressed all the management issues raised in the letter by the KNAO.

Principles of accountability and transparency demand that it is the role of the Government of Kenya and its public officers to answer questions posed by the citizenry they serve. To politicize issues is an act of the impunity that has allowed scandals of loss of billions of Kenya shillings to occur. Kenyan’s will remember cases such as scandals of financial impropriety that cost the Exchequer huge losses, for instance the country’s National Social Security Fund. Though the figures listed below may well be small as opposed to other scandals such as Anglo-leasing and Goldenberg, which almost crippled Kenya’s economic security, the Partnership for Change contends that it is impropriety regarding trusteeship of small sums of money that ultimately end up exploding into scandals in the range of billions.

Furthermore, when the media raises issues in the public interest, duty bearers in public office are best advised to RESPOND to the issues being raised; not just to dismiss every question on accountability to mere politics. This is the era of accountability and the Partnership for Change will demand nothing short of answers when such queries are raised by the media and citizenry.

To avert this, the Partnership for Change on behalf of its membership, through Mars Group Kenya and the Youth Interactive Portal for Enterprise (Yipe.org) is thus posing 10 questions with the ultimate objective of not having to witness another scandal later on, if it emerges that the Youth Fund was indeed losing much needed money.

The Partnership for Change is grateful to the media when it acts in the public interest by playing its role as a public watchdog.

Read Full Report: “A fish rots from the head … down”: Crony Capitalism at the Kenya Youth Enterprise Development Fund

Related Documents:

Youth Fund Status Report as at 31st March 2009

YOUTH ENTERPRISE DEVELOPMENT FUND ORDER 2007
Financial Statement Audit Of The Youth Enterprise Development Fund Board June 30th 2008