The World Bank Group (WBG) has imposed a 30-month debarment on Ernst & Young LLP in Kenya (EY Kenya), citing the firm’s involvement in corrupt and fraudulent practices in two major projects in Somalia. The debarment, effective immediately, bars EY Kenya and its affiliates from participating in any WBG-financed projects during this period.
The sanction follows an investigation into the Somali Core Economic Institutions and Opportunities Program (SCORE) and the Second Public Financial Management Capacity Strengthening Project (PFM II). SCORE aimed to foster private sector development and job creation, while PFM II sought to enhance financial management systems within Somalia’s federal and state governments.
EY Kenya was found to have failed to disclose a conflict of interest during the selection and implementation of four contracts related to these projects. Additionally, the firm permitted allowances to be paid to project officials, which constitutes a breach of the WBG Consultant Guidelines. “EY Kenya’s actions undermine the integrity of these critical development initiatives,” the WBG stated.
The debarment forms part of a settlement agreement in which EY Kenya admitted to the misconduct and agreed to implement a comprehensive integrity compliance program. This program must align with the principles outlined in the WBG Integrity Compliance Guidelines. The company also pledged continued cooperation with the WBG Integrity Vice Presidency.
The World Bank acknowledged EY Kenya’s admission of wrongdoing and cooperation as factors in reducing the debarment period. The settlement agreement noted, “EY Kenya’s voluntary remedial actions, including disciplining involved staff and refraining from bidding on WBG-financed contracts during negotiations, contributed to the reduced sanction.”
The ramifications of this debarment extend beyond the World Bank. Due to an Agreement for Mutual Enforcement of Debarment Decisions, signed by various multilateral development banks in 2010, EY Kenya’s debarment is likely to be recognized and enforced by other international financial institutions.
