Audit reveals how Kenya Ports Authority loses millions

MOMBASA: An audit report has revealed how Kenya Ports Authority (KPA) loses millions of shillings due to loopholes in tracking systems. Last year alone, KPA lost Sh37 million as revenue.

Despite implementation of a multi-million-shilling information system, flaws exist due to lack of skills and poor coordination between Kenya Revenue Authority (KRA) and KPA. Last year, many ships left the Mombasa port without being checked, denying KPA millions in revenue.

The audit by KPMG says there are thousands of instances in 2014 and 2015 when due to information failures, hundreds of ships docked into the Port of Mombasa or left without paying the mandatory navigational, security and harbour charges.

The report dated November 2015 notes that there may be exemptions to the charges but that KPA did not supply such exemptions to auditors.
"There is risk KPA could lose out on revenue if vessels, which are not exempt, are not charged the mandatory port dues,” says the report. An audit report commissioned by former KPA Chairman Danson Mungatana has revealed KPA was losing millions of shillings in revenue following failure to follow new information technology, which was introduced at the port.

The report, which KPA managers have not implemented following several recommendations to stop the corporation from losing the money from businessmen with malicious intentions, says there are 733 instances when the ships did not pay mandatory security charges after docking at the port. The report, which has put KPA managers on the spot, says the ships, which left the port without paying security charges, made KPA to lose Sh7.3 million. The analysis also says KPA lost Sh15 million after ships docked at the port without paying another mandatory navigational charges of Sh15 million.

The report indicated last year, KPA did not collect Sh14 million, which was to be charged as harbour fee for 948 instances.

It said lack of information technology skills among the KPA managers was the main problem, which if not resolved will continue causing massive losses.

And last year, a forensic audit revealed some 962 workers and 423 managers at KPA had non-existent academic certificates or qualifications. Confidential documents filed at a Mombasa court shed light on the fake certificate employment scam at the agency, which had already sacked 132 workers.