Auditor-General unearths 'gross theft' at transport fund

Taxpayers could have lost millions of shillings at the Mechanical and Transport Fund to questionable transactions, according to the Auditor-General.

The Auditor-General, Edward Ouko in his audit report tabled in Parliament last week, revealed that goods worth millions of shillings were stolen from the fund after delivery.

In his report for the financial year ended June 2014, the auditor said the Kenya National Highways Authority (KeNHA) went ahead and paid Sh22.5million for the electronic goods, despite only a handful being accepted.

The supplier was competitively awarded the contract for the supply of the three rack-mount type computer servers, 94 desktop computers, 12 touch smart desktop computers, eight laptop computers and 46 integrated service routers in June 2013.

The tender for the goods that were purchased under the northern corridor transport improvement project was worth Sh25.5 million. "The supplier is said to have delivered the goods to the Mechanical and Transport Fund of the Ministry of Transport and Infrastructure on November 9, 2013 vide delivery note number 1063," the report reads in part.

Ouko says the inspection and acceptance committee inspected and accepted only eight laptop computers and 19 integrated service routers valued at Sh2.9 million.

"It is reported that the rest of the goods though delivered were stolen before they could be assessed by the inspection and acceptance committee," states the auditor in his report.

Despite all these, KeNHA paid Sh22.5 million, for all the goods in July 2014. "No value for money was obtained from the expenditure of Sh22,589,200," said the auditor.

The Mechanical Transport Fund was established in 2003 to provide funds for maintenance and renewal of vehicles, plants and equipment.

Revenue growth

In 2014, the fund saw its revenues grow by 8.8 per cent to Sh1.3 billion. In his statement in the report, Francis Gitau, senior principal engineer roads and chairman of the fund noted that it had challenges in the formulation and standardisation of equipment rental rates for use by both the public and private sectors, purchase of key new equipment and training of staff.

"Some of the challenges experienced during the year include equipment hiring rates that are not competitive which at times made contractors opt for cheaper alternatives, aging equipment resulting in frequent breakdowns and longer repair period with lesser working hours," Gitau said in a statement that accompanied the report.

In the year under review, the Fund raised an income of Sh1.3 billion from hiring of equipment and miscellaneous services. It also received Sh43.9 million from the sale of boarded items. The Government advanced it a grant of Sh10.7 million. This brought the total income at the fund to Sh1.35 billion in 2014.

It spent Sh43.5 million on transport and subsistence allowances, another Sh629 million went to routine maintenance of vehicles, equipment and other assets.