Kisumu awarded a tender to a firm that quoted Sh100 million more than the lowest bidder to install Enterprise Resource Planning system (ERP), Auditor General Edward Ouko said.
The latest audit report shows the lowest tender had a price of Sh66 million yet the county went for a firm that quoted Sh165 million.
The firm was selected on the basis that it had the highest score combining technical and financial evaluation.
“This was contrary to procurement laws which states that the highest combined score is used only where the request for proposal method is used,” Ouko said.
In the latest report, Ouko says the statement of receipts and payments indicate that the acquisition of assets amounted to Sh1.55 billion during the year ended June 30, 2017.
Of this, Sh75.9 million was for the purchase of ICT equipment. However, payments amounting to Sh17.2 million were not supported.
Under the Sh165.3 million tender awarded on April 10, 2017, the works carried out included the requirements analysis, design, customisation, testing, training, deployment, and maintenance of an integrated enterprise resource planner system.
Ouko says the supplier was paid Sh33 million during the 2017-18 for system analysis and process re-alignment which also entailed supply of Microsoft dynamic NAV 2017-50 virtual user licences.
However, from the review of the tender process documentation, the report indicates that the tender was closed on February 10, 2017, with notifications for regrets made on February 13, 2017.
Ouko noted that the professional opinion by the head of the procurement function was provided on February 3, 2017, on the entire procurement process even before the procurement process had started.
This included the choice of the supplier which was unprocedural.
Further, the reports revealed that notification of award was made on March 20, 2017, indicating payments were to be staggered in two financial years at Sh70 million in 2016-17 and Sh95. 3 million in 2017-18.
According to Ouko, at the time of audit, the ERP system had not been installed and they could establish whether the county has obtained value for the funds used to date.
The supply, delivery, installation, configuration and commissioning of bulk licenses and Microsoft products for 300 computer devices was awarded to a supplier at Sh13,920,000million on January 2016. The supplier was paid Sh7.9 million during the year under review.
However, physical verification revealed that Microsoft Inc. had withdrawn the licences due to non-payments thus stalling active directory operation of Microsoft office 365 for 300 devices, SharePoint for document management and collaboration service, Skype for business and anti-virus solution Webroot.
Ouko noted that this represented loss of value for money already spent, adding that the property of Sh17.2 million for purchase of ICT equipment could not be verified.
On purchase of vehicles and other transport equipment, the Auditor General reports that the county spent Sh1.55 billion during the year ended June 30, 2017 out of which Sh94.2 million relates to purchases of vehicles and other transport equipment.
However, payments of Sh 64.8 million out of Sh94.2 million were not supported. “Consequently, the property of Sh64.8 million for purchases of vehicles and other transport equipment could not be verified,” Ouko added.
Further, reports showed that the property of Sh20.5 million for overhaul of vehicles and other transport equipment could not be confirmed.
The statement of receipts and payments indicates that the acquisition of assets amounted to Sh1.55 billion during the year ended June 30, 2017 out of which Sh27 million were used to overhaul the vehicles.
But Ouko says the payments of Sh20.5 million were not supported.
