Frustrated auditors: Tough hurdles probe team had to jump to audit payout

Auditor General Edward Ouko. [JENIPHER WACHIE, STANDARD]

It is two minutes past 4pm, March 6, 2015. Frustration is getting the better side of Remmy Koech, the Kenya Railways risk and audit manager.

Koech had been trying for months to secure surveyors to help his audit team in the field before it was too late. It was now eight months since the team was promised surveyors to support their work.

He was getting tired of the excuses to postpone the exercise. He decided to do one final official email to a Victor Wahome, who was the land surveyor on the project.

“The matter of postponement to March 8 was agreed after the discussion between the MD, surveyor and RAM (Risk and Audit Manager). The surveyor was categorical that he needed only two weeks to hand over to the China Road and Bridge Corporation (CRBC),” he wrote.

“There was not to be any new excuse for not availing (sic) a surveyor/surveyors to assist auditors to execute an audit which the audit committee as part of their oversight responsibility approved in their sitting in July 2014,” he said.

Timeliness question

Koech went on about how his team had been frustrated to access information relevant to the audit.

“We have tried as much as possible to accommodate continuing land acquisition process in the planning of the audit. The assurance audit will be meaningless if it is not timely,” he wrote.

This email must have finally landed where it was needed. An hour later, his response came.

“I wish to state that personally I have no problem or any reservations against the audit you have planned, neither am I in anyway unwilling to facilitate,” Wahome wrote back.

He explained that the only challenge he had was that all his surveyors were engaged in the field and his men were under immense pressure to deliver the land on time to the contractor under ‘critical timelines.’

“Currently, all the surveyors and even GIS technicians (all the survey staff) are engaged,” he wrote.

He said the option of giving him one surveyor would not work since each section had its own surveyor.

“Note that it’s not my excuse but the demand of the project. The only other option is to stop the planned activities for the two weeks to facilitate the audit,” he wrote. They both knew that stopping the project even for a single day was not an option.
Koech and his team had to wait. All this time, compensation was going on unsupervised.

But when they were eventually let to do the job, it was too late. Most payments had been done. To date, the National Lands Commission (NLC) has refused to provide information relating to the payments. Even a directive by Parliament has not helped.

The National Assembly’s Public Accounts Committee in March ordered a special audit into the National Land Commission’s spending of Sh2.8 billion, purportedly to compensate those whose land was taken over for the construction of the SGR.

Correct payments

The parliamentary watchdog now wants the Auditor General to investigate the disputed compensation and table a report in Parliament.

In some cases, management kept insisting that they had made the correct payments. But when the auditors visited the ground, they found that what was presented in the documents was very different.

For example, management insisted that a plot in Voi was in the railway corridor and even went ahead to provide the GPS coordinates.

But when the audit team visited the site together with NLC land valuers and Kenya Railways surveyors, they found the compensated land owner to be outside the corridor.

“Mechanism should be put in place to recover the money in line with the Land Act 2012 section 116,” auditors said.

In one of its recommendations, the internal audit team asked for an independent review of the valuations which were identified during the audit.

“This will provide an opportunity to understand which areas require enhancement and internal controls,” the auditors say in their recommendations.

Auditors asked the management to identify land which was due to various reasons acquired by the corporation and plan on how the corporation can obtain beneficial ownership of them.

“The corporation should put in place a mechanism to recover all the monies established to have been paid to ineligible people affected by the project (PAPs), either by error, undeserving injurious affection, loss of business or due to change in the route,” the report adds.

They also want mapping of all persons who will be affected by the project in the future independently done before the compensation process is started.

“This will reduce the possibility of paying persons who are not eligible for compensation,” the report adds.