Auditor General puts State on spotlight over wastage of Sh450b

The Auditor General Edward Ouko has questioned expenditure for the 2013-2014 financial year in a new report, which has revealed massive loopholes and potential loss of public funds running into billions of shillings.

Ouko’s report raised various questions over the expenditure of Sh450 billion in unsupported expenditures, pending bills, bank reconciliations among other audit queries under various departments, ministries and agencies.

The report faults the Treasury for depositing $2 billion (Sh203,204,700,000) Sovereign Bond obtained in June last year at an offshore account contrary to provision of the Constitution and Public Finance Management Act-2012.

The report also noted that Sh53,201,344,900 was withdrawn from the offshore account to fund the repayment of the syndicate loan but was recorded in 2014/2015 financial year books. He added that the authority of the Controller of Budget to incur the expenditure was however not obtained.

However, the Auditor General notes that the balance of the actual net proceeds from the Sovereign Bond were correctly reflected in the offshore account and in Central Bank’s special account during the audit.

The report revealed that the Government incurred Sh559 million expenditure under the Ministry of Foreign Affairs for the construction of the Islamabad Mission Chancery ambassador’s residence commenced in May 2008.

However, according to the report, the contractor abandoned the project before its completion.

The report flagged the Foreign Affairs Ministry for purchase of eight residential houses in Pretoria, South Africa at a cost of Sh95 million. The report noted that two houses were condemned immediately after the purchase while six others are in deplorable states.

“In addition, the ministry has approved the demolition of the two condemned houses No.318 located at Waterkloof/Polaris street, which was acquired at Sh3,960,000 and no.281 located at Waterkloof/Crown street. No explanation has been provided for purchasing condemned houses and then immediately approving their demolition,” the audit states.

Lands ministry

The audit shows that the Ministry of Lands paid Sh8,779,072 during the 2013-14 financial year for landscaping works at National Spatial Data Infrastructure Complex and Construction of six external toilets. However, according to the review by the auditor, the ministry failed to provide explanation for payment yet the external toilets had not been constructed while landscaping was incomplete.

The report also notes inspection of markets constructed under the Economic Stimulus Projects in various parts of the country revealed that most markets were incomplete while those which had been completed were not in use. This is despite the Government spending Sh472,581,005.

The report established that the Ministry of Communication had paid Sh84.7 million for various supply of goods and services, which had been earlier paid by the Office of President and the Cabinet’s office.

The irregular payments were paid for installation of LAN in Marsabit, Isiolo, Trans Nzoia, Turkana and West Pokot counties, provision of consultancy services on ICT training policy and ICT training strategy among other services.

The Parliamentary Service Commission (PSC) has been flagged for delay and cost variation of tender for the remodeling of Senate Chamber and officers for Parliament at Sh2.2 billion. Though the project was stipulated to run from October 2012 to February 2014, according to the report, PSC overpaid the contract by Sh172 million.