The Education Ministry is on the spot after the Auditor General unearthed a string of procurement irregularities that led to the lose of Sh100 million.
In the audit report for the 2016-2017 financial year, Auditor General Edward Ouko reveals that the ministry awarded contracts to the highest bidders, single-sourced services and made payments for expired leases.
Ouko said this is an illegality.
The ministry is accused of illegally splitting tenders for the purchase of computers and accessories yet the law restricts the use of direct quotations for purchases above Sh1 million.
The ministry split the tenders worth Sh 13.2 million into 12 small portions each costing less than Sh1 million to avoid using open tendering.
Education Principal Secretary Belio Kipsang was the accounting officer during the period under review.
According to the report tabled in Parliament, the ministry illegally awarded contracts for the supply and delivery of sanitary towels at a cost of Sh32.3 million.
The report notes that taxpayers lost Sh25.1 million after the ministry ignored the lowest bidders and awarded contracts to six companies that quoted the highest prices.
Nexhom Africa, which was ranked third in the commercial evaluation stage, was awarded a tender worth Sh23.3 million against another company that quoted Sh21.4 million.
Another firm Konyipad Construction was paid Sh23.8 million while a firm that quoted Sh19.9 million was left out in a deal that occasioned the loss of Sh3.9 million.
A firm that quoted the lowest bid at Sh30.1 million was brushed aside in favour of Imani Holdings which had quoted Sh 32.1 million leading to a loss of Sh 1.9 million.
Other highest bidders awarded contracts were Paula Services (Sh50 million) against the lowest bidder of Sh40.1 million, Rossaby Enterprises (Sh49.5 million) opposed to Sh42.8 million and Hassib Investments (Sh23.9 million) against Sh 23.1 million put forward by the lowest bidder.
A total of 52 bids were received and opened but after the preliminary technical and commercial evaluation were carried out, 10 bidders proceeded to price comparison from which six were picked.
"Examination of the evaluation revealed that six bidders who quoted higher prices compared to the lowest bidders were awarded the tenders and therefore occasioning a possible loss of Sh25,173,451,” Ouko said.
The auditor concluded that the ministry ignored the procedures and criteria set out by its own tender documents.
"No satisfactory explanation was provided for the above anomaly. In the circumstances, it has not been possible to confirm that the excess expenditure,” Ouko said.
The ministry has also been indicted for irregularly paying a lifts maintenance firm a total of Sh596,800 without a valid contract.
A review of procurement records, according to the audit report, revealed that the services were rendered on an expired contract which was in force during the period between July 2010- June 2013.
The services were, therefore, rendered against the procurement law which require that an accounting officer of a procuring entity approves extension of contract period upon recommendation of an evaluation committee.
“The state department was therefore in breach of the law and the validity of the expenditure of Sh596,800 for the year ended 30 June 2017 could not be ascertained,” the auditor observed.
The ministry is on the spot for making payments in respect to the repairs of motor vehicles (Sh 2.8 million), accommodation and conference laptops costing Sh1.6 million and procurement of air tickets worth Sh3.1 million through direct procurement.
Ouko says the award of the contracts could have been used by the ministry to avoid fair competition.
The auditors revealed that the ministry bought 30 tyres at a cost of Sh459,420 without any immediate use plan.
The tyres were found to be lying in the stores in what the auditors said amounted to misuse of public resources.
Ouko said this was against the Public Finance Management law which stipulates that the accounting officer should ensure that the resources of the respective entity are used in a lawful, authorised, effective, efficient, economical and transparent.
The ministry also paid Sh2.2 million being rent of office space for various state department offices whose valid lease agreements with 90 landlords and property managers were not availed for audit verification.
(Edited by P. Wanambisi)
