Auditor General Nancy Gathungu has flagged more than Sh12 billion in irregular expenditure at the State Department for ICT for the financial year ended June 2019.
In her latest audit report, Gathungu raises the red flag over significant expenses that have not been explained, including billions of shillings in payments to foreign contractors without supporting documents.
“In my opinion, because of the significance of the matters discussed, the financial statements do not present fairly the financial position of the State Department for Information Communication Technology as of June 30, 2019 and its financial performance and its cash flows for the year then ended,” said the Auditor General in the report.
“Based on the audit procedures performed, I confirm that public resources have not been applied lawfully and in an effective way,” she added.
In the first place, Gathungu flagged the State Department for presenting different sets of records, with the amount of money recorded in the financial statements and that on the trial balance having a variance of Sh28.2 billion. The Auditor General said while the management presented revised financial statements, the adjustments between the first and second set were not supported with the relevant documents to justify the amendments. For example, the charge for domestic travel was revised from Sh34 million to Sh41 million without explanation.
At the same time, the State department was accused of paying Sh12.7 billion to several foreign companies without the appropriate supporting documentation or explanation.
This included Sh10 billion paid to contractors through Italian Bank UNICREDIT SPA, said to be payments for the Konza Technocity Project.
Another Sh1.7 billion was paid through China’s EXIM Bank to contractors for the National Optic Fibre Backbone Infrastructure, while KBC Bank Belgium paid out Sh712.9 million to a contractor said to have worked on the County Connectivity Project to connect county government offices to the Internet.
“No details in respect to the date the payments were made by the banks, details of authorisation to the banks, payments and bank debit advices,” explained the Auditor General.
The State Department has also been accused of violating a presidential directive to centralise procurement of all ICT equipment and services.