94.

Encashing of cheques was observed in most districts which was not surprising considering the
need for regular cash payments such as the compensation of individuals for their transport and
per diem expenses incurred to attend a training event in a remote part of the district.

95. The procedures around districts issuing cheques involving the District Accountant appeared
robust but the sheer volume of expenditure paid in cash for some districts – Kajiado (35%),
Tana River (28%) and Isiolo (17%), as percentage of total expenditures, raised concerns for
INT. An ‘open’ cheque allows it to be cashed rather than directly credited to an account, and
requires the two original signatories to endorse or re-sign the ‘closed’ cheque. A ‘closed’
cheque was crossed ‘not negotiable account payee only’. All cheques should have been issued
‘closed’. The volume of cashed cheques for Kajiado, Tana River and Isiolo was determined
from the narration on the bank statements but it was noted that there were additional cheques
of which INT was aware had been cashed but which were not reflected in the bank statement.

96. The most commonly observed cheques cashed were those cheques for imprest cash for the
district office itself. INT’s understanding is that these cheques would be drawn in the name of
the DMO and jointly signed and ‘opened’ by both the DMO and the District Accountant. INT
performed tests on these cheques to ensure that the cash was recorded within the imprest
records. It was noted during the review of cleared cheques that imprest cash cheques were
written to persons other than the DMO.

97. INT also identified cheques which were cashed that were drawn to individuals other than the
DMO, and in some cases not even project staff. In Kajiado, Henry K. Muthoka, Gad Kinuthia,
and James Kaniaru cashed project cheques – neither Muthoka or Kaniaru were recorded as
district staff. In Isiolo, Evangeline Njura Nyaua, Florence Karimi Mwenda, John Wachira
Muriithi, and Nephet Mwangi Gchee cashed project cheques – none of whom were recorded as
district staff. In Tana River, Mohamed Kala Hep cashed a cheque but was not district staff.

98. A number of cheques written to suppliers were cashed, see Table 11 below. Note that a
number of the cheques listed, pre-date the transaction date and some of the differences in the
dates span the financial year end date (see the last two entries in the table in relation to Nyeri
district). Some of the payees of the cashed cheque shown in Table 11 below actually had bank
accounts as it was noted that there are payee cheques written to the same suppliers which were
not cashed.

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