An internal audit report has unearthed procurement irregularities at the National Land Commission.
The report reveals inflation of tenders, falsified tender minutes, multiple allocations of tenders and improper payments.
The NLC Audit and Risk Management Committee highlighted various payments amounting to Sh46 million and concluded that taxpayers had been defrauded.
The report names companies that were paid millions of shillings for supplying goods to the commission, which is under ongoing investigation over improper use of public funds.
The report dated March 2016 revealed how procurement officers altered tender bids and in some cases openly changed figures for specific bidding companies contrary to procurement laws. It also shows how the tender committee retrogressively approved a number of direct procurements which were done unprocedurally.
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A company called Acute Supplies was paid Sh1.7 million to supply 20 tablets but the report concludes that company did not deliver the electronic gadgets.
The Commission paid Persio Limited Sh1.1 million for the supply of 16 digital voice recorders and 12 digital headphones which also were not delivered.
“There was no evidence of tender committee approval of 12 digital recorder headphones that were not delivered,” the report added.
Value Digital Company received Sh5.6 million from NLC but failed to deliver 20 toners, 30 hard disks, 30 modems, 40 8GB flash disks and 60 16GB flash disks.
Yesterday the Star exclusively reported that NLC chairman Muhammad Swazuri authorised Sh314 million to purchase five dubious plots for the Standard Gauge Railway.
But the latest procurement revelations draw attention to NLC Chief Executive Officer Tom Chavangi who is the Commission's accounting officer.
Also on the spot is procurement boss David Kitalinga who in some cases received procurement bids directly through his email instead of the tender box as required by law.
The internal audit observed that the system was prone to manipulation.
The audit has also uncovered transactions where the prices of commodities were inflated.
For instance, Mediant Data Communications was paid Sh6.6 million for the supply of 10 office paper shredders at Sh316,100 each.
Yet, according to the audit, the market value of one shredder was Sh128,000, meaning the price was increased by 150 per cent. So in the procurement of ten shredders, NLC lost nearly Sh1.9 million.
The same company received a Sh2.1 million in a separate tender to supply another five paper shredders at a cost of Sh317,000 each and 15 water dispensers at a cost of Sh37,500 each.
The audit report observed that the market price for the water dispensers was Sh18,000 per dispenser, meaning the commission lost Sh1.2 million in the deal.
“The commission did not therefore benefit from the competitive pricing, economies of scale, fairness and equity and most of all transparency and accountability in the procurement process,” concludes the report.
The NLC also paid Smartways Holdings Sh4 million for the supply of two photocopiers and two scanners.
“The scanners functionalities are embedded in the photocopiers and therefore not a priority yet the commission had other pressing financial needs,” the audit committee concluded.
NLC also procured an ordinary biro pen at Sh150, a packet of staple pins at sh1,500 and a scribbling pad at 2,500.
The quotations for the tender were altered in favour of Formula One General Supplies which was the bid winner.
The audit and risk management committee also criticised the secretariat for spending millions on advertisement in newspapers whose national coverage is doubtful.
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In 2014 alone, NLC paid Sunday Express over Sh22 million for adverts and another Sh10 million to Sun Weekly. The Sun Weekly was charging NLC Sh625,371 for a full page add.
The procurements law requires that any advert be placed in at least two newspapers with national circulation.
“There was no value for money in the expenditures under the publishing vote. There was no wide coverage and some items were published repeatedly,” the audit committee concluded.
It is not clear how NLC Commissioners have dealt with the issues raised in the audit report.
However, the risk committee recommended that the management should ensure recovery of funds for the irregular procurement transactions.
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