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Tourism agency at centre of illegal Sh8.5b payment

By Roselyne Obala | April 1st 2016

The Kenya Tourism Fund fraudulently paid Sh8.5 billion to acquire the Coast branch of Kenya Utalii College.

The college was later renamed Ronald Ngala Utalii College.

According to an audit report, the fund’s managers are said to have inflated the cost of acquiring the college to Sh10.4 billion against the initial cost of Sh1.95 billion.

The report on the fund that falls under the Ministry of Tourism is being scrutinised by the National Assembly’s Public Investment Committee (PIC).

It emerged upon review by the auditors that the project, which was one of the Vision 2030 flagship ventures, was not among the planned projects.

In a grilling of the fund’s managers yesterday, the MPs refused to give audience to four officials; acting Chief Executive Officer Joseph Chelope, deputy Head of Finance Margaret Njoka, acting Procurement Officer Gerald Omondi and accountant David Mwangi for failing to submit the documents sought.

The four were scheduled to respond to queries on breach of the procurement and financials laws, the Constitution and abuse of office.

The MPs said the level of embezzlement of public funds within Government entities was astonishing.

They are also probing the Sh180 million rip-off at the Youth Enterprise Development Fund (YEDF).

“The project was approved by the Cabinet in 2007 at a cost of Sh1.95 billion but the implementation ended up costing a whopping Sh10.4 billion without approval,” PIC vice chairman Kimani Ichung’wa (Kikuyu) said.

Cash Cow

He added: “The procurement process of the project consultants was at a cost of Sh1.4 billion, and done in total disregard of the procurement law.”

The MPs also discovered that the fund had been operating with a board of trustees contrary to the Tourism Act.

Committee Chairman Adan Keynan said every Government entity was turning out to be a ‘cash-cow’ for a few.

“What we are witnessing is a disaster. It is sad that every Government institution is dogged with corruption cases. We are not going to spare anyone, we will ensure public funds are properly invested as stipulated in law,” said Mr Keynan.

The MPs were in agreement with the audit report that the project, despite its costly aspect, may not realise value for money.

“There was no justification of renaming the Kenya Utalii College, Coast Branch to Ronald Ngala Utalii College, resulting in the inflated cost that was not approved by the Cabinet,” reads the report.

It continues: “There is a possible fraud scheme, which may result in the loss of public funds amounting to approximately Sh8.5 billion. The said college does not stand on any legal ground and, therefore, should be reverted to the Utalii College to be developed as one of its campuses.”

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