Court fight exposes Sh63m M-Pesa fraud in Bridge schools

Mr Onyango sued Bridge at the Labour Relations Court after termination of his employment over alleged gross misconduct, stemming from accusations of failure to effectively supervise employees in the finance department and failure to diligently oversee its payroll function.

He was also accused of failing to monitor the organisation’s cash flow accounts and other financial transactions and failing to detect anomalies and suspected fraud against it.

The termination followed investigations of the organisation’s financial activities by audit firm KMPG, which discovered fraudulent transactions, though it did not implicate Mr Onyango, saying he was not culpable.

The KPMG probe noted that there was lack of oversight and verification of the data that was uploaded onto the M-Pesa platform. The investigations also confirmed that the responsibility for this oversight was with Mr Onyango.

The probe report implicated some members of staff in the finance department, who were under his supervision.

It attributed the fraud to lack of monitoring and reconciliation of monthly salary expenses and lack of oversight over the finance team responsible for initiation and approval of payments on the M-Pesa platform. It also blamed lack of communication between the payroll and finance teams regarding pertinent details.

In his claim, Mr Onyango, who was sacked in August 2018, wanted the court to find that termination of his services was unlawful.

He also sought compensation of Sh53.5 million for loss of future income for five years. He contended that the employer relied on a KPMG report to terminate his services, yet the report did not implicate him in the alleged fraud.

However, Justice Bernard Manani found that Bridge Academies had valid reasons to believe that the financial loss it suffered was due to Mr Onyango’s negligence in the discharge of his duties.

The judge said this was because, according to the evidence presented to the court, the responsibility for obviating fraud against the organisation was with its finance director, a position which Mr Onyango held.

“As the person in charge of the finance department, the responsibility of ensuring effective oversight over the finance team lay with the Claimant. As such, the fact that the KPMG report blames the loss of funds on weaknesses in these areas can only imply that the Claimant had failed to ensure that there were appropriate controls in place to prevent the loss,” said Justice Manani.

The court, however, found that the institution failed to observe fair procedure whilst processing the termination of Mr Onyango by not furnishing him with the full investigation report, and his request was ignored.

“The court finds that the Respondent’s failure to provide the Claimant with the full KPMG report and the data on the laptop computer, compromised his right to prepare his defense thus affecting the propriety of the disciplinary process against him. To this extent, the court declares the disciplinary process against the Claimant unfair,” said Justice Manani.

The court stated that the decision to terminate Mr Onyango’s employment was procedurally flawed and was declared unfair on this account. The judge awarded him Sh1.8 million as compensation for the unfair termination of his contract of service, pay in lieu of accrued leave, and pay for the 22 days worked in his last month at the organisation.

Bridge stated that it did not terminate Mr Onyango’s services on account of culpability for fraud. Rather, it contended that he was found guilty of negligence in the performance of his duties, which facilitated the commission of the fraud.

In his claim, Mr Onyango alleged a witch-hunt, claiming his decision to fight corruption within Bridge Academies was the reason why the management began fighting and victimizing him.

He contended that before his tribulations, he had called out the institution’s Managing Director on what he perceived to be irregular financial dealings, which the said Managing Director refused to account for. As such, he contended that he is a victim of a witch-hunt.