UN Opens Audit After EACC Probe Into Alleged Sh1.55 Billion Fraud in Treasury-Managed Programme

The United Nations’ International Fund for Agricultural Development (IFAD) has launched an internal audit into one of its Kenya-funded programmes following allegations that senior National Treasury officials siphoned Sh1.55 billion meant for rural development projects.

The move follows investigations by the Ethics and Anti-Corruption Commission (EACC), which alleges that officials exploited weak financial controls to divert funds from the Programme for Rural Outreach of Financial Innovations and Technologies (PROFIT), a project jointly financed by the Kenyan government and IFAD.

In a statement to Business Daily, IFAD said it had initiated internal oversight processes after learning of the court proceedings filed by the anti-graft agency.

“While the Fund cannot comment on ongoing legal proceedings, we take this and all allegations of fraud seriously. Ensuring IFAD resources are used for their intended purposes is essential to our mission and enables every investment to deliver for small-scale farmers and rural communities,” the agency said.

“In accordance with IFAD’s zero-tolerance approach to fraud, corruption and other prohibited practices, we have referred this matter to the Fund’s Office of Audit and Oversight (AUO) and the Independent Office of Evaluation of IFAD (IOE) and are taking all necessary steps to safeguard the integrity of IFAD financing,” it added.

According to court documents filed by the EACC, the alleged fraud involved the misappropriation of Sh1.55 billion through fraudulent payments, cash withdrawals and transfers to companies and individuals linked to some of the suspects.

The commission claims that a former accountant attached to the PROFIT programme withdrew Sh799.8 million in cash, while additional funds were transferred to various entities before being used to acquire residential and commercial properties in Nairobi, Machakos and Uasin Gishu counties.

The EACC emphasized that the allegations are contained in documents filed before the High Court and that the accused persons are yet to respond to the claims in court.

IFAD noted that the alleged theft occurred after the PROFIT programme had officially closed in December 2019, when the agency’s direct oversight of the project had ended.

The High Court has since issued preservation orders allowing the EACC to seize the assets allegedly acquired using the funds and restraining the suspects and their associates from transferring or disposing of the properties and money pending the determination of a recovery suit.

Among those named in the court filings are former PROFIT programme accountant Billy Otieno Obango, Gladys Julliet Chepkarat, National Treasury senior accountants John Maina Muriithi and Nemwel Moturi Mutonya, John Ngure Kabutha, Senior Deputy Accountant General Lilian Wanjiku Dishon, Head of Accounting Unit George Kihara, Principal Accountant Susan Warukira, Sylvia Awino Obango, Philip Sigo Chepkarat, 020 Investments Limited and Jarods Agency Limited.

According to the EACC, Sh206 million in residual programme funds was transferred from the PROFIT account to the Rural Kenya Financial Inclusion Facility (RK-FINFA) account at Housing Finance Bank in March and May 2023.

The commission further alleges that the National Treasury later released an additional Sh1.379 billion into the programme’s account at Co-operative Bank of Kenya. Of that amount, Sh579.3 million was allegedly transferred to various entities, while Sh799.8 million was withdrawn in cash.

Investigators also claim that between November 2019 and June 2022, three signatories to the PROFIT account transferred Sh81.4 million to 020 Investments Limited, which the EACC describes as a proxy company linked to one of the suspects.

The anti-graft agency further alleges that in October 2022, two suspects fraudulently opened a bank account in the name of the PROFIT programme at KCB Bank using forged documents, despite the project having already ended. The commission says Sh175.3 million was subsequently transferred into the account from the National Treasury.

The EACC maintains that the fraudulent payments were processed using fake payment vouchers and funding requests purportedly linked to IFAD, even though the donor had already ceased financing the programme.

The PROFIT programme was launched in December 2010 under the National Treasury’s Directorate of Budget, Fiscal and Economic Affairs to improve financial inclusion for rural communities. It was funded at a total cost of approximately Sh4 billion, with IFAD contributing about Sh3.93 billion and the Kenyan government providing Sh72.7 million, before it ended in December 2019.

IFAD remains one of Kenya’s key development partners, having committed more than Sh75 billion to 21 projects across the country. The agency has continued to finance initiatives in food security, climate resilience and agriculture, including an Sh11.7 billion facility approved earlier this year to support fertiliser imports and a Sh16.4 billion loan signed in 2025 for the Integrated Natural Resources Management Programme.