•The disbursements were effected on the last week of the respective quarters.
•Irregularities in the management of government-owned properties in the missions were also flagged.
Image: FILE
Kenyan missions abroad lost more than Sh1 billion in the last year as a result of a weak shilling, sparking an audit query after some activities were left unfunded.
Auditor General Nancy Gathungu has given a harsh verdict on the events, saying the money would have, instead, helped solve the cash crisis at the missions.
“My opinion is not modified in respect of this matter,” she said in a review of the Ministry of Foreign Affairs’ books of accounts as of June 30, 2023.
In the first instance, the missions incurred Sh761,597,333 on foreign exchange losses due to differences between the official exchange rate and the Central Bank of Kenya rate and transactions made in the host country currencies.
“This negatively affected the liquidity of the missions resulting to non-implementation of planned activities,” Gathungu said.
In another instance, the Department of Foreign Affairs spent Sh353,010,380 in respect of foreign exchange losses.
“The exchange losses negatively affected the liquidity of the missions resulting in pending bills amounting to Sh332,062,297 in the missions,” the auditor general said.
The Kenya shilling bounced back recently after months of slump in value as compared with other major international currencies.
The audit revealed that many missions were suffering a cash flow crisis as a result of late disbursements from the ministry.
In the year under review, the Foreign Affairs ministry disbursed a total of Sh12.3 billion to the missions – monies released on a quarterly basis.
Gathungu said her review of records provided for the audit indicated that the disbursements were effected on the last week of the respective quarters.
“This resulting in delayed payments of foreign service allowance to the staff, payment of office expenses and delay in procurement processes,” she said.
The auditor general said that in the circumstances, the delayed disbursement impacted negatively on the staff morale and service delivery to the public.
“The delayed disbursement negatively affected supplier’s confidence to the missions.”
The audit has also flagged irregularities in the management of government-owned properties in the missions.
Among instances fleshed out include delayed works on chancery buildings and envoys’ residences, lack of ownership documents and non-utilisation of the facilities.
A case in point is in London where, despite about Sh1.7 billion being provided for purchase of chancery, the department was still paying rent at Sh86 million annually.
The process of acquiring the chancery was halted at the time of the review, with the auditor warning of further increase in cost of rent following the delays.
The mission in London, it emerges, continued to pay rent for leased house for the High Commissioner since October 2022 at Sh2 million monthly.
Deputy High Commission also stayed in a leased house paid at Sh1.7 million quarterly, the report reveals.
“The State Department has continued to incur rental expenses which could have been avoided had the houses been renovated in a timely manner,” Gathungu said.
In Islamabad, the report reveals that Sh415 million paid to a contractor to construct the chancery building and high commissioners’ residence may have gone down the drain.
The department terminated the contract and engaged another contractor for completion of the pending works, and the final payment was made in June 2020.
Gathungu says that a review in August last year revealed that the facilities were in poor condition in the face of no drainage, incomplete work on lifts, cracked walls and poor workmanship.
It emerged that the Foreign Affairs department was in the process of engaging another contractor the remedial works which remained undone as of November last year,
“It was not possible to confirm whether the public obtained value for money of Sh415,904,556 already spent on the contracts,” the auditor said.
In Kinshasa, the government has four plots of which the one that hosts the chancery did not have ownership documents at the time of the audit review.
The audit reveals that the ministry is yet to obtain proof of ownership of the land to enable the Democratic Republic of Congo authorities issue an allotment letter and process the title deed.
“In the circumstances, the ownership of the department’s land in Kinshasa could not be confirmed,” the report reads.
In Pretoria, auditors established that the ambassadors’ residence remained unoccupied despite taxpayers forking Sh765 million in the construction works.
Gathungu says an audit inspection carried out in August last year revealed that the ambassador’s residence which had been completed remained vacant since it had not been furnished.
“In the circumstances, the department continued to incur unnecessary rental expenses for the Deputy Head of Mission,” she said.
In further revelations, 12 missions that were audited lacked registers of supplies and standardised procurement documents.
“The lack of missions-specific guidelines may have affected the efficiency of procurement processes, hence impacting negatively on service delivery by the missions.”