Prisons paid companies Sh500m for ‘air’ supply

Auditor General Nancy Gathungu [David Njaaga, Standard]

Taxpayers could have lost more than Sh500 million that Prisons Department allegedly paid to ghost suppliers, an audit report has revealed. Records at the State Department for Correctional Services indicate that payments were made to firms that supplied “air” to prisons.

Some companies also received payments for goods supplied to certain prisons yet records indicate that they did not have contracts with any of the facilities. According to Auditor General Nancy Gathungu’s report for 2019/2020, other suppliers received millions of shillings despite not having entered any tender agreement with prisons department.

Further, some stations did not order or receive ration on the dates indicated in the delivery notes. Documents for orders and deliveries for the goods purportedly supplied were also missing in seven prisons.

“Examination of payment records at the State Department for Correctional Services in respect of payments of historical pending bills during the financial year 2017/2018 revealed that payments totaling Sh555,652,356 were made at the State Department’s headquarters on behalf of various prison stations,” reveals the report.

Examination of pending bills data and a comparison between National Treasury Integrated Financial Management Information System (IFMIS) and total expenditure returns at various prisons revealed that Sh419,976,543 was overpaid compared to actual deliveries.

The actual supplies amounted to Sh190,347,882 and IFMIS payments amounted to Sh610,324,425.

“The unsupported claims or payments relate to historical supplies covering financial years 2014/2015 up to 2017/2018,” states the report.

The Ethics and Anti-Corruption Commission (EACC) is already investigating the irregular payments, procurement and over payments.

Further, the taxpayer could also lose another Sh22 million in stalled projects.

Stalled projects

Audit inspection and verification at the various prisons in Nairobi, Eastern, Nyanza, Western, Rift Valley and Coastal regions revealed projects that had stalled largely due to challenges in funding.

At Shimo La Tewa Medium Prison for instance, construction of a two-bedroom unit staff housing stalled in 2009 when the works were 67 per cent complete, while at Manyani Maximum Prison, construction of a two-bedroom senior officers’ houses stalled in 2010 when the works were 30 per cent complete. 

“Management has not explained satisfactorily the efforts being made for completion of the projects. Consequently, value for money from the expenditure totaling Sh21.6 million incurred so far on the stalled projects could not be ascertained,” states the report.