August 5, 2002
An NGO has been implicated in the mismanagement of funds meant for victims of the 1998 bomb blast.
It is alleged to have diverted part of the money donated by the United States Government to private accounts.
The organization was appointed to manage a 18m shillings grant given through the US Agency for International Development to small businesses destroyed by the 7 August 1998, bomb blast in Nairobi. More than 200 people died in the blast, while 5,000 were injured or maimed.
Last week, sources said some of the money was transferred from the organization's accounts to a company associated with the NGO chairman.
A report prepared by auditing firm Ernst & Young says 2m shillings was transferred to a second company between June and July, 1999, as management fee for the loans.
A USAid administrator, Ms Shanon Lovgreen, said the agency had questioned why some money was transferred from the first organization to another. "We did not understand why we had to contract on organization only for it to contract another to manage the same funds."
Documents prepared by the NGO show that a law company, A R Rebelo Advocates, received 750,000 shillings, but an audit between January, 1999, and December, 2000, shows only 300,000 shillings was paid.
Last week, the owner of the law firm, Mr Aurelio Rebelo, confirmed that he only received 300,000 shillings.
"We raised the matter with USAid when we realized that we were required to receive more money. But we were not successful," he said.
The lawyer said several victims who ran businesses in Ufundi House, which was flattened by the bomb, had also complained.
Money was also said to have been paid to people not affected by the blast. But the NGO chairman yesterday insisted that the financial transactions were approved by USAid.
"There was no mismanagement because the agency approved the beneficiaries identified by the NGO," he said. He told the Nation yesterday that the second company was contracted because it had the capacity to manage the scheme. Sources claim money was paid to the family of a Kenya Power and Lighting Company employee who died in circumstances not related to the blast.
The auditors listed 47 beneficiaries who are said to have been paid loans and grants amounting to 15.7m shillings.
The matter was raised with several other donor agents in a letter sent by a consultant involved in the scheme.
More Information on NGO Credibility
FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
