The National Assembly's Public Investments Committee on Governance and Education has ordered fresh investigations into the construction of a 1,000-bed students' hostel at Jaramogi Oginga Odinga University of Science and Technology (JOOUST) following audit queries over contract variations, payments totalling Sh844 million and a pending court case involving the contractor.
The committee, chaired by Luanda MP Dick Maungu, resolved to summon former Vice-Chancellor Prof Stephen Gaya Agong, project consultants, auditors and other key parties after lawmakers questioned the project's escalating costs and whether procurement laws were followed.
The multi-million-shilling hostel project was awarded to Sasah General Merchants in February 2010 at a contract sum of Sh663.9 million and was scheduled for completion within three years. However, certified payments eventually rose to Sh844.1 million, prompting concerns over the additional expenditure.
The move follows findings contained in the Auditor-General's reports for the 2023/24 and 2024/25 financial years, which revealed that the university failed to provide documents supporting contract variations worth Sh180.1 million. Auditors also noted that completion and handover certificates were not availed during the audit despite the hostel already being occupied by students.
The committee further learnt that the contractor has sued the university in Civil Case No. E002 of 2023 over alleged unpaid dues, a development that lawmakers warned could expose taxpayers to additional legal costs and financial liabilities.
Representing the Office of the Auditor-General, Kisumu Regional Office, CPA Kennedy Ongoi cautioned that unresolved contractual disputes involving public institutions often result in avoidable losses to the taxpayer.
"Where a contractor takes a public institution to court demanding payment, the institution risks paying legal fees and penalties. These are avoidable expenses if projects are managed prudently," Ongoi told the committee.
Appearing before the committee, former Vice-Chancellor Prof Stephen Gaya Agong, who served until June 19, 2023, defended his administration, saying the university had paid "close to Sh600 million" during his tenure and maintained that the final payment certificate reflected only Sh4.8 million.
However, committee chairperson Dick Maungu challenged the explanation, pointing to project records indicating that Certificate Number Five, prepared on June 9, 2023 ten days before Prof Agong left office, showed cumulative certified payments amounting to approximately Sh844 million.
"You exited the university on June 19, 2023, and before you left, Certificate Number Five had already been prepared showing Sh844 million. Meaning all this happened within your tenure," said Maungu.
Committee documents indicated that the project underwent several contract variations, including additional payments of Sh19.8 million, Sh38.1 million, Sh44.1 million, Sh528,000 and another Sh79.6 million classified as "fluctuations."
The committee questioned whether the additional payments complied with the Public Procurement and Asset Disposal Act, particularly the distinction between contract variations and price fluctuations.
"There is something unique called fluctuations amounting to Sh79.6 million. We need to understand where this falls under procurement law because fluctuations and variations are different," said Maungu.
Prof Agong denied approving the disputed Sh79.6 million fluctuation payment, insisting it was not included in the final accounts he signed before leaving office.
He further explained that part of the expenditure may have been incurred after students occupied the hostel through maintenance works, including repairs following a fire incident.
"Some of the expenditure could have related to maintenance works undertaken after occupation, including repairs after a fire incident," Agong said, adding that retaining the original contractor was the most practical option since students were already living in the facility.
Despite the explanation, lawmakers remained unconvinced and demanded a more comprehensive inquiry into the project.
Kilome MP Thaddeus Nzambia proposed that the committee reconvene with all key stakeholders, including the former and current vice-chancellors, the contractor and the Auditor-General, to establish the full facts surrounding the project.
"We need another hearing bringing together the former Vice-Chancellor, the current Vice-Chancellor, the contractor and the Auditor-General so that we can establish the truth once and for all," said Nzambia.
Lungalunga MP Chiforomodo Mangale Munga directed that all project records be produced before the committee to facilitate a thorough review of the procurement process and expenditure.
Central Imenti MP Moses Kirima said the inquiry had exposed deeper issues requiring further scrutiny.
"We have opened a Pandora's box. We now need to establish who authorised these payments, whether they were lawful and why the contractor eventually moved to court," said Kirima.
Current Vice-Chancellor Prof Emily Akuno appealed to the committee to help resolve the long-running dispute, saying the pending litigation continued to weigh heavily on the institution.
At the close of the session, Maungu directed that Prof Agong be furnished with all project documents before the next hearing to enable him to respond comprehensively to the audit findings.
He said the committee would establish individual accountability and recommend recovery of any public funds found to have been irregularly spent.
"Our responsibility is to determine accountability, establish whether procurement laws were followed and ensure that any public funds lost are recovered," Maungu said.
The committee is expected to reconvene after reviewing additional documents and hearing evidence from all parties involved as Parliament intensifies scrutiny of public investment projects amid growing concerns over accountability and prudent use of taxpayers' money.
