Internal Procedural Faults Audit report has recently revealed that between August to November 2022, Ecobank Kenya in its ledgers may have led to the manipulation of transactions and possible fraud.
Ecobank Kenya’s card operations team did not upload critical transaction files as required, and there was no rigorous control over the chargeback process.
This led to the erroneous inclusion of KSh 5.6 billion in the Merchant Acquiring General Ledger (GL) and KSh 162,346 in 347 entries were rejected by MasterCard but remained unsettled.
Ecobank Kenya could not recover chargebacks worth KSh 234,464 and revealed that many chargebacks were not debited to the merchants’ accounts immediately as prescribed.
“There were no properly documented operating procedures and accounting entries for different card products. This led to the lumping up of different entries for different card products into the merchant acquiring GL,” the lender reported.
The review was not conclusive because it did not specify how much money was lost due to these weaknesses. This was mainly because the General Ledger was not exclusively used to record Merchant acquiring details, but was also used to settle entries of other card products like prepaid cards and ATM transactions.
“A residual balance of US$2.1 million was left outstanding in GL155000068 unsubstantiated. This balance was a reduction from the initial amount which was approximately US$15 million as of July 2022,” the report explained.
The Crack Team
Prompted to inquire into these irregularities, Ecobank Kenya constituted a team made up of its internal controllers and operations officers to determine if the outstanding debit included transactions that were not settled. To achieve this investigation, the team obtained transaction and settlement files.
However, the magnanimity of the data in the ledgers made the process tedious and the team was not entirely sure about the nature of some of the settlements because the transaction files were uploaded months after the movement of cash. Eleven entries with KSh 2.1 billion were duplicated.
“Due to this omission, it was impossible to determine the amount payable to merchants, the amount receivable from schemes and the service commission receivable from the merchants on these days,” the report said.
The team recommended that reversals of the erroneous accounting process should be advised by the CFO. They also requested an independent oversight of the maker-checker process by Ecobank Kenya’s Internal Control Department.
“The taskforce therefore recommends documentation of operating procedures and accounting entries for all the card products as well as the regular training of the card and digital operations team,” Ecobank Kenya said in the report.
Alleged involvement In Government’s Corruption Scheme.
Kenya is currently paying an extra Ksh. 40 Billion to Ecobank Nigeria and Ecobank Kenya for Line 5 Pipeline tender from Mombasa to Nairobi yet the entities were not part of the original contract as financiers of the project.
Zakhem Int. from Lebanon was awarded the 450Km Pipeline project, that cost Ksh. 48B and was funded by six banks which Ecobank wasn’t among those, with KPC covering 28% of the cost.
Ecobank is likely abetting in corrupt dealings and corruption through money laundering for such kinds of dealings. So, they must be reminded, that the government of the day might just be in power for a season and time will reckon when a no -nonsense government will arise to power and they’ll bite their lips.
KenyanHour 