How KICC almost lost Sh666m in suspect deals

                                              The KICC and Times Tower in Nairobi. [Photo: Wilberforce Okwiri, Standard]

State auditors say they have unearthed fraudulent claims worth Sh666,460,683 million out of Sh1 billion pending bills at the Kenyatta International Convention Centre.

Auditor General Edward Ouko, in a special audit report dated September 2018, had established that contractors, suppliers and service providers were owed Sh1,053,391,910, most of it in irregular deals.

The figure includes Sh745 million accrued from the World Trade Organisation (WTO) conference held in Nairobi in 2015 and a further Sh308 million claims related to non-WTO claims.  

Ouko’s report showed that only claims worth Sh386,931,228 were genuine, adding that KICC management should liaise with Treasury to provide funding for payment of the claims. KICC is yet to begin paying.

The special audit recommended that three top officials be held liable for the questionable contracts amounting to Sh1 billion.

The special audit was conducted between March 1 and September 3, 2018 following a request by KICC through a letter dated October 5, 2017.

Some contractors have been threatening court action to seek orders to attach KICC property to have their claims settled. Ouko advised KICC to settle the bills quickly to avoid the risk.

“The corporation risks its assets being auctioned in the event the above recommended claims are not settled as most claimants have LPOs, LSOs and award letters and deliveries of goods, services and confirmation of works emanating from KICC,” he said in the report.

The report was tabled in the House just days after KICC Managing Director Nana Gecaga said they would only clear the debts once Ouko’s office cleared them.

“As KICC and a parastatal we are tasked to ensure that we spend taxpayer money the correct way, so if procurement processes were not followed in said prior events that is what we are going to do,” she said then.

The audit report indicated that out of 17 projects implemented by KICC, only four  amounting to Sh204 million had signed contracts, while nine amounting to Sh266 million had letters of award.

Another four amounting to Sh60 million did not have any award letters or contracts.

“Further, we established that out of the 17 projects implemented, 14 were procured through  (a) restricted tendering process and 12 firms awarded through the process were not in KICC’s list of pre-qualified suppliers or contractors,” Ouko said.

The claims not recommended for payment lack legitimacy of law and have no adequate valid supporting documents. However, Ouko asked KICC to make provision of contingent liability in their annual accounts for the amounts not recommended for payment.

KICC had already paid one of the contractors more than double the original claim following an arbitration process.

Dimension Data Solutions Limited, which was awarded a tender to supply and install an electronic surveillance system network, ended up earning Sh182.5 million up from the contract value of Sh95 million following a lengthy arbitration process.