Ouko queries Sh1.4 billion spending at KPC

Top Kenya Pipeline Company (KPC) officials are on the spot over questionable spending of Sh1.44 billion, according to a new audit.

In his latest report for the year ended June 2018, Auditor General Edward Ouko flags payment of overtime allowances totalling Sh306.9 million to 1,080 employees among the suspect expenditure.

Out of this amount, Sh97.6 million was paid contrary to the company’s staff rules and regulations to 231 employees who were earning responsibility allowances.

Overtime allowances

In addition, overtime allowance payments totalling Sh171.9 million made to 164 employees exceeded 25 per cent of their respective annual gross salaries and in some instances, the annual overtime allowances paid were as high as 250 per cent of annual gross salaries payable.

This means the claimants worked for more days than were available in the financial year.

“In the circumstances, it has not been possible to confirm the regularity and probity of the amount incurred on the allowances,” reads part of the report.

The State Corporation also spent Sh72.8 million to purchase motor vehicles. Out of the amount, Sh9 million was spent on motor vehicle accessories which included chevrons, car mats, stripes, reflectors, life savers and key tags.

According to the report, the items were purchased as low-value procurement through petty cash payments and reimbursed claims lodged by the company staff and since the purchases occurred on a regular basis, the total value of the items for the year exceeded the threshold for low-value procurement.

Interestingly, the quantities of the accessories purchased exceeded the company’s fleet requirements. In addition, they were bought at prices that exceeded by as much as 350 per cent similar purchases made during the year under review.

“Only a small number of the items were confirmed to have been issued for use in the company’s fleet of vehicles and none could be found in the stores. In the circumstances, the purchases were made irregularly and receipt and use of the majority of the items for the company’s benefit cannot be confirmed,” reads part of the report.

Internal advertisement

Apart from irregular payments, Ouko in his report, revealed that KPC appointed staff to newly created positions without first seeking and obtaining approval from Treasury as provided for in the Government circulars.

In addition, two new positions that did not exist in the company’s establishment were created and filled through internal advertisement.

During the year under review, KPC also appointed several staff on promotion to positions up to seven grades higher than those that the appointees occupied before the promotions.

According to Ouko, this was against the company’s staff rules, regulations and career guidelines handbook which require appointments on promotion should take into consideration academic qualifications, experience and seniority.

Although the appointees were said to possess the requisite academic qualifications, they lacked requisite experience and seniority as defined in the firm’s career progression guidelines.