Auditor reveals shocking misuse of public resources by State corporations

Auditor General Edward Ouko addressing the press at his Anniverssary Towers office. [Photo by Jenipher Wachie/Standard]

Billions of shillings belonging to the taxpayer and entrusted to State corporations are feared to have gone up in smoke as the agencies cannot account for the money.

In his latest 2015-2016 report, Auditor General Edward Ouko exposes how officials entrusted with managing State corporations deliberately paid out cash for ghost projects, inflated contract prices and blatantly violated various procurement laws in the course of their duties.

The managers of Semi-Autonomous Government Agencies failed to account for the billions received from the National Treasury to fund projects and services such as air transport services, cheap power, education, quality healthcare, water, infrastructure and nuclear energy.

Kenya Airports Authority (KAA) is on the spot for awarding tenders worth billions of shillings and later terminating them, but only after paying the money out for work not done.

In addition, KAA cannot explain why a court order giving it authority to own land on which Jomo Kenyatta International Airport sits has never been effected.

It would therefore not be surprising if Kenyans woke up one day and heard that private developers had taken over their premier airport.

Car park

The National Hospital Insurance Fund (NHIF) is on the spot for escalating the cost of building the NHIF multi-storey car park by 337 per cent of the original cost. Mr Ouko says NHIF has never justified the increased cost from Sh909.7 million to Sh4 billion.

The National Social Security Fund (NSSF) risks losing more than Sh1.5 billion from unremitted members’ contributions, non-collection of rent, irregular land transfers and stalled projects.

In his latest report, Ouko revealed that employers owed NSSF Sh755 million, which was not remitted on time, from a sample of 20 employer files maintained at nine different NSSF branches.

He further queried why the NSSF management failed to terminate an agreement it entered with AMP Properties Ltd for the sale of 69.16 acres of land in Mavoko.

Although the purchaser paid Sh12.6 million for the parcels of land on August 23, 2011, being 10 per cent of the purchase price, he failed to pay the balance of Sh113.4 million in 90 days as stipulated in the deal, but NSSF is yet to terminate the agreement.

Ouko also queries why NSSF failed to collect Sh239, 500,000 due from its Hazina Plaza Mombasa, formerly called Palana Hotel.

Kenya Medical Supplies Authority is on the spot for failing to acquire ownership documents for several pieces of land in Mombasa, Eldoret, Kisumu, Nakuru, Kakamega, Nyeri and Garissa, all valued at Sh180 million.

Geothermal Development Corporation (GDC) failed to remit taxes amounting to Sh405 million to Kenya Revenue Authority, and continues to attract penalties.

Ouko says as at June 30, 2016, the corporation’s financial statement reflected current tax liabilities of Sh1.6 billion.

This includes a balance of Sh1.4 billion on account of unpaid corporate income tax for the financial year ending June 30, 2015.

The report further indicates that in the year under review, GDC sold steam worth Sh3.1 billion from the 59 wells at the Olkaria geothermal station to KenGen.

“However, as at June 30, 2016, only the cost of 26 out of 59 wells have been recognised in these financial statements. The Government has authorised recognition of the 26 wells drilled in Olkaria as assets in the GDC books of account, pending completion of Government vesting procedures,” adds the report.

Members of the Judicial Service Commission have also been accused of attending many board meetings but not accounting for the sitting allowances they were paid for all the sittings.

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