Auditor General reveals financial misconduct, significant outstanding bills, and poor management of school resources at St. Charles Lwanga Secondary School, led by Principal Benta Ayacko

The most recent report from the Auditor General for the fiscal year ending June 30, 2024, has exposed questionable practices at St. Charles Lwanga under Madam Ayacko's administration.

It is alleged that Ayacko has mismanaged the school's resources due to her arrogance.

Stakeholders concur with the findings of the report, asserting that it accurately represents the reality and circumstances on the ground.

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According to the report:

1. Weak Controls over Management of Petty Cash and lmprests

The statement of receipts and payments reflects boarding and school fund amount of
Kshs.50,569,435 which, as disclosed in Note I to the financial statements, includes local transport/travelling amount of Kshs.2,674,240.

Review of records revealed the following:
weaknesses in the management of petty cash and imprests:
i. No imprest register was maintained to record all imprests issued, surrendered and
outstanding balances. This was contrary to the provisions of Regulation 93(4)(c) of
the Public Finance Management (National Government) Regulations, 2015.
Officers were paid per diem and travel allowances directly to their bank accounts
without the use of imprest warrants. This was contrary to Regulation 91(2) of the Public
Finance Management (National Government) Regulations, 2015, which states that the
officer authorized to hold and operate an imprest shall make formal application forthe
imprest through an imprest warrant.
I
iii. lt was noted that various activities were undertaken throughout the financial year
without prior approvals. As a result, it is not possible for the Management to prevent
activities that were not objective and strategic to the goals of the School.
iv. Examination of documents revealed that some officers took multiple imprests during
the year which sometimes overlapped, contrary to Section 93(4Xb) of the Public
Finance Management (National Government) Regulations, 2015, which states that
before issuing temporary imprest under paragraph (2), the Accounting Officer shall
ensure that the applicant has no outstanding imprests.
v. Although imprests were issued, no surrender documents were provided for audit
verification, contrary to 93(5) of the Public Finance Management (National
Government) Regulations, 2015, which states that a holder of a temporary imprest
shall account or surrender the imprest within 7 working days after returning to duty
station.
ln the circumstances Management was in breach of the law
The audit was conducted in accordance with the lnternational Standards for Supreme
Audit lnstitutions (lSSAl) 4000. The standard requires that I comply with ethical
requirements and plan and perform the audit to obtain assurance about whether the
activities, financial transactions and information reflected in the financial statements
comply, in all material respects, with the authorities that govern them. I believe that the
audit evidence I have obtained is sufficient and appropriate to provide a basis for my
conclusion.
Report of the Awiitor-Oeneral otr Moi Ntabohunse Airls' High Scfutol /or the rcqr ended J0 June. 2024 - l'ligori REPORT ON EFFECTIVENESS OF INTERNAL CONTROLS, RISK MANAGEMENT
AND GOVERNANCE
Conclusion
As required by Section 7(1)(a) of the Public Audit Act, 2015, based on the audit
procedures performed, because of the significance of the matters discussed in the Basis
for Adverse Opinion and the Basis for Conclusion on Effectiveness of lnternal Controls,
Risk Management and Governance sections of my report, I confirm that internal controls,
risk management and governance were not effective.
Basis for Conclusion

1. Weak Controls over Management of Cash and Cash Equivalents

Review of internal controls over cash and cash equivalents revealed the following
weaknesses:
The school had eight bank accounts. However, there were no documentary evidence
provided to confirm the approval by the Principal Secretary Ministry of Education or
the National Treasury to open the account.
Cash books were not properly updated and balanced on daily, weekly and or monthly
basis.
.
VI
The cash book entries were incomplete and did not include key details like entry date,
receipts or payment voucher number/ reference, Descriptions/particulars among
other details, rendering the cash book incomplete and un-reliable
Revenue collections was spent at source without proper approvals. No vote book and
vote controls hence misclassifications and weak budgetary controls.
The payment vouchers were not pre-numbered, duly authorized and voted before
being paid and recorded in the cash book.
The monthly reconciliations were not done, checked and approved on timely basis.
The cash books were not closed off and balances brought forward on monthly basis.
vii. There was no evidence that copies of bank reconciliation statements were send to
the relevant authorities on timely basis in line with the law.
ii. Payment vouchers and receipts were not raised and adequately supported for various
transactions made.
tx No system generated cash books and ledgers were provided for audit review
Report of thc .4rditor-General on Moi Nytthohanse Girls' High School /or lhe ycar ended 30 June. 2021 Migori
L'oun4
10 x The School used standing imprest system or use of petty cash in some cases.
However, there was no evidence of approved cash floats and reimbursement system
is being applied and approved holders with their signature specimens.
xt No regular cash counts and cash surveys were carried.
xii. The Cash books were manual with numerous cancellations', white outs, unclear
figures, dates, references, transactions descriptions, thus prone to errors and
manipulations
xiii. Some procurement of items and services were done through cash imprests or direct
payments/claims or reimbursements which may be abused or used to circumvent the
procurement laws. Although most of the procured items were within the low-cost
procurements (Kshs.50,000 and below) range, they were rampant across all the
departments and were done to split procurements. Further, the payments/receipts or
invoices were not supported by ETR receipts casting doubts on their authenticity.
ln the circumstances, the effectiveness of internal controls over cash and cash
equivalents could not be confirmed.