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The Ethics and Anti-Corruption Commission (EACC) has finalized its probe into claims of mismanagement within the Communications Authority of Kenya's staff mortgage scheme
A Sigh of Relief for Ezra Chiloba
In a letter addressed to CA Director General David Mugonyi dated April 4, 2024, the EACC CEO Twalib Mbarak confirmed that the allegations made last year concerning irregularities had been scrutinized.
He said that the anti-corruption watchdog concluded that there was not enough proof to back up the claims against former Director General Ezra Chiloba and other officials involved in the scheme.
The Details of the Allegations
It all began on September 26, 2023, when reports of wrongdoing in the handling of the mortgage scheme meant for staff at the Communications Authority started making rounds.
Even though the case is now closed, the EACC has given the Communications Authority a bit of homework.
They've suggested that the authority takes another look at its Human Resource policies and procedures, just to double-check that everything aligns with the best practices set out in their guidelines.
President Ruto nominates Ezra Chiloba to diplomatic post
Chiloba has been cleared before he is scheduled to appear before the National Assembly Committee on Defence, Intelligence and Foreign Relations for vetting on Thursday April 11.
The former CA DG was nominated as the Consul General of Los Angeles in the United States, where Thomas Kwaka, popularly known as Big Ted has been serving.
5 key issues behind Ezra Chiloba's suspension from Communications Authority
Before this nomination, he left the Communications Authority at the height of the staff mortgage scandal.
The news desk obtained information about the report of the 9th Special Board Audit & Risk Assurance Committee to find out the five key reasons behind Chiloba's suspension.
The reports also said the board should suspend the directors of Human Resources, Legal Services, Finance and the Internal Auditor.
Defaults on mortgages totalling Sh28.9 million
One of the most alarming findings was the approval and granting of mortgages without proper consideration of the contract term, resulting in defaults amounting to Sh28.9 million.
This financial mismanagement raised serious concerns about the oversight and decision-making processes within CAK.
Refinancing mortgages without evidence
The committee discovered that mortgages amounting to Sh364.8 million were refinanced for staff who lacked evidence of upgrades or improvements to their purchased or constructed houses.
This revelation exposed a lack of due diligence and raised questions about the propriety of such financial transactions.
Material variance in property valuation
A material variance of more than 20% was found in property valuation between government assessments and privately contracted valuations.
Such a significant discrepancy indicates potential irregularities in the valuation process and calls into question the accuracy of financial reporting.
READ: Why ICT Ministry was not briefed prior to Ezra Chiloba's suspension
Understatement of loan balances
The investigation uncovered an understatement of loan balances for former staff members of CAK.
This discrepancy in financial records suggested a lack of transparency and accountability within the organization.
Inadequate approvals for construction mortgages
CAK was found to have failed to obtain adequate approvals for architectural plans and designs related to the Construction Mortgage Facility.
This lapse exposed the authority to potential abuse of the facility and financial risks.
Additionally, it was noted that the authority failed to undertake timely Mortgage Insurance Protection Advances for the property, further compounding the financial risk associated with the Staff Mortgage Scheme.