The National Youth Service fraudulently lost Sh1.8 billion in three instances, a special audit report by the Auditor General has revealed.
The report stated that businesswoman Josephine Kabura received Sh1.2 billion through the fraudulent practices at NYS.
Kabura is one of the suspects in the case concerning the loss of Sh791 million at the National Youth Service.
The report tabled in Parliament on Tuesday also states she was "meant to receive part of a failed fraudulent payment of Sh695 million" in another instance.
Auditor General Edward Ouko recommended that criminal investigations be conducted against all the officers involved in the fraudulent dealings.
The report also says all companies, suppliers and business names mentioned in the special audit as having been paid irregularly should be discontinued from trading with the government and appropriate legal action taken against them.
It further recommends that NYS management should confirm whether there was commensurate service delivery equivalent to Sh12.5 million paid to Mutahi Ngunyi's Consulting House.
The report also says the audit noted opportunities that exposed the Sh3 billion set aside for NYS cohorts to the risk of misappropriation due to "inadequate controls over payments of the cohorts."
"These could have led to the funding of NYS operations using funds meant to be held in trust of Saccos and that the NYS Huduma Funds amounting to Sh551,750,000, that was subsequently reimbursed in January 2016," the report says.
It adds that control weaknesses also led to payments of Sh70 million to the NYS Gilgil Field Unit that "has not been satisfactory accounted for."
The report says that all the irregular wages paid to cohorts of NYS officers should be recovered.
Kabura's damning affidavit
But Kabura filed a damning affidavit in February 2016 implicating former CS Anne Waiguru, whose Devolution docket included the NYS.
She said that, prior to the Sh791 million contract, Waiguru had assisted her to “secure other contracts, with about 30 LPOs for my other companies, at NYS, with a value in excess of Sh400 million”.
Waiguru dismissed her as a “crazy woman” whom she has never met and came to know about only after the scandal broke.
Read: Waiguru was behind NYS deals - Josephine Kabura
The following month, the High Court temporarily halted the prosecution of Kabura and other suspects in NYS fraud but DPP Keriako Tobiko opposed this.
Tobiko said Kabura received more than Sh16 million from the NYS.
Kabura is a director of Tucking Stitch Emporium, which supplied 3,000 pairs of gumboots, 2,833 overalls and 2,817 white dust coats to the NYS.
Other suspects in the case include businessman Ben Gethi, Jedidah Wangui, John Kago, a driver at KCB and Samwel Wachenje alias Sam Mwadim.
Others are Anthony Kihara, Paul Gachoka, John Vandamme, Martin Wanjohi and lawyer Patrick Ogola.
Justice George Odunga made the decision after Ogola filed an application stating the prosecution was unlawful.