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How taxpayers lost Sh12.6bn in court cases against State agencies

The Commission House building that houses the Public Service Commission offices,Nairobi. [Elvis Ogina,Standard]

The public lost a total of Sh12.6 billion through court cases in the 2021/2022 financial year, it has emerged.

According to the Public Service Commission 2021/2022 Annual report on the Status of compliance with values and principles in Articles 10 and 232 of the Constitution, 874 judgments out of a total of 3,962 were delivered in the period under review with the majority being against public institutions.

"Sh12.6 billion (82 per cent) was awarded against public institutions. This shows that the government is losing a lot of funds in awards made in favour of litigants," stated the report in part.

An investigation of the report revealed that State corporations and Semi-Autonomous Government Agencies (SAGAs) lost Sh6.47 billion, Ministries and State Departments Sh6.04 billion, public universities Sh76.87 million, Constitutional Commissions and Independent offices Sh16.25 million and TVETs Sh800,000 in the period under review.

Contract-related cases accounted for Sh5.74 billion, arbitration cases Sh1.47 billion, constitutional and human rights cases Sh813.39 million, employment-related cases Sh473.38 million, land-related cases Sh165.6 million, vehicle accident 16.6 million, judicial review Sh10.1 million, regulatory Sh2.4 million and medical negligence Sh2.1 million. Other cases accounted for Sh3.9 billion.

The report concluded that "Public institutions to conduct due diligence before signing contracts to ensure that the contracts do not contain unfavourable terms. Public institutions to adhere to the terms of contracts to avoid unnecessary litigation."

At the same time, a total of Sh1.2 billion was lost in the period under review according to the reported cases of corruption. The bulk was by public universities which lost Sh1.18 billion while State corporations and SAGAs lost Sh34 million. TVETs lost Sh70,000.

Officers prosecuted

The report established that 338 cases of corruption were reported by 22 institutions, while 320 of the cases were reported by State corporations and SAGAs. Additionally, 64 officers were prosecuted in court whereas 249 cases were handled administratively. To this end, the report recommended that the Commission establishes the reasons for the high number of corruption cases reported in State Corporations and SAGAs and the Office of the Auditor-General to establish the reasons for the high loss of public funds through corruption in public universities.

The report further delved into the management of gifts in Public Service and established that gifts received by officers and institutions included alcoholic drinks, artifacts, livestock, electronics, foodstuff, clothing, cars, cash and gift vouchers, gift hamper, IEC material, non-alcoholic drinks, sports kit, detergents, cutlery, furniture among others. The value of the gifts received by public officers amounted to Sh29 million.

Moreover, 866 gifts were received and declared by public officers in 80 institutions. Notably, 64 out of 80 institutions provided copies of their gift registers: Constitutional Commissions and Independent Offices (3), Ministries and State Departments (3), Public Universities (11), State Corporations and SAGAs (42), Statutory Commissions and Authorities (2) and TVETs (3);

The highest number of gifts declared was by State Corporations and SAGAs at 82 per cent, followed by Public Universities at 11 per cent. Officers in five institutions received alcoholic drinks worth Sh74,850.

Article 76 of the Constitution provides that a gift or donation to a State officer on a public or official occasion is a gift or donation to the Republic and shall be delivered to the State unless exempted under an Act of Parliament. The Leadership and Integrity Act, of 2012 provides for the management of gifts which is further amplified by regulations on the management of gifts.

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