Agency faulted over transformers deal

Auditor General Edward Ouko when he appeared before the Senate County Public and Investment Committee at County Hall, Nairobi. [Boniface Okendo/Standard]

The Auditor General has faulted the Rural Electrification Authority (REA) for directly procuring 200 transformers, subjecting taxpayers to possible losses.

In his report for the financial year ending June 30, 2018, Edward Ouko noted that procurement of the transformers was supposed to be done through a competitive process. "The authority procured 200 transformers from a Tanzanian company through direct method of procurement as opposed to the required method of open tender," said Ouko.

REA, which is responsible for supplying power to households, businesses, schools and hospitals in rural areas, said they opted for the expeditious direct procurement method to keep up with the need for the Government to supply laptops to class one pupils.

"Management (of REA) considered the procurement to be urgent, outside its work plan and unforeseen owing to government’s plan to introduce the laptops projects in all public schools, whose success was dependent on electricity connection,” said Ouko. REA, which has since rebranded to Rural Electrification and Renewable Energy Corporation, said in reaching the decision, it relied on Section 103 (2b) of Public Procurement and Asset Disposal Act, 2015 that allows for direct procurement if there is an urgent need for the goods, works or services.

This is especially if engaging in tendering proceedings is impractical.

However, Mr Ouko was not satisfied with the explanation, giving the agency's financial books a qualified opinion. The Education Ministry has since discontinued the programme, opting to instead build computer laboratory for each school.

"There has been a policy change in programme from one child, one laptop to the construction of computer laboratories for ICT integration,” Education Principal Secretary Dr Belio Kipsang told the National Assembly’s Education Committee while presenting budgetary proposals.

Mr Ouko also found that REA brought forward into the financial year under review work-in-progress (WIP) balances of about Sh2.3 billion, but did not support them with detailed project analysis.

“The WIP brought forward further includes a transitional account balance of Sh1,004,740,651 which ought to have cleared into the WIP ledger, but was outstanding as of June 30, 2018,” he said.