MPs seek DCI, EACC probe on accounting officers over cash misuse

At least eight ministries, state departments and agencies could be probed over alleged fraud, flawed procurement and financial impropriety.

A new report by the Public Accounts Committee has described activities that could come to haunt current and former accounting officers of MDAs.

The report followed a review of the Auditor General's queries at the MDAs for the financial year ending June 30, 2018. It was tabled on Tuesday.

MPs on the committee have urged the DCI and Ethics and Anti-Corruption Commission to probe and institute criminal proceedings against officers found culpable.

The committee is chaired by Ugunja MP Opiyo Wandayi.

PAC also called on the Treasury to reprimand accounting officers of 16 MDAs who submitted unsupported expenditures of Sh16 billion.

In some instances, the committee has recommended accounting officers be surcharged for omissions that have cost taxpayers' money.

Those adversely mentioned are ministries with huge budgets such as Education, Sports, Energy, Health and the National Treasury.

The Judiciary, IEBC, and Prisons department are among those whose officials would be surcharged for unexplained expenditures.

MPs also want Devolution PS Julius Korir investigated over his role in the Sh1.7 billion tendering of Computed Tomography (CT) Scans.

Korir served as Health Principal Secretary in 2014 when the procurement deal for the scanners was signed.

MPs want former IEBC Chief Executive Officer Ezra Chiloba surcharged for Sh691.5 million incurred for catering services by the county offices.

This will be required unless he provides a satisfactory explanation for incurring expenditures during the 2017 General Election.

The contracts were awarded to the service providers based on pre-determined rates issued from the commission headquarters and in complete disregard for the Constitution, the report said.

Auditors said in the absence of a competitive procurement process for the catering services, it could not be confirmed whether there was value for money in the expenditure.

MPs have also ordered that former Correctional Services PSs be surcharged Sh69 million for undelivered food rations to six prisons in Nairobi.

Ambassador Richard Ekai and Alfred Cheruiyot (currently PS Post Training and Skills Development) were the accounting officers during the period under review.

An audit verification in October 2018 revealed that delivery, receipt and taking charge of the rations could not be traced in the records at the prisons.

The ex-official will also be surcharged Sh42 million, which was purported to be confidential expenses on monitoring of extreme violence and radicalisation across penal institutions.

MPs have given the officer three months to provide the certificate confirming the confidential expense, otherwise he will be surcharged.

PAC also wants a Petroleum PS surcharged Sh870.3 million for payments made for the Mwananchi Gas project, which was President Uhuru Kenyatta’s grand plan to provide poor households with cheap cooking gas.

The PS will be surcharged if he fails to provide an explanation for incurring the Sh870 million and for entering into a contract for procurement without lawful tender documents.

PAC said the shortcomings indicated the project had not attained its purpose and further, value-for-money had not been obtained on expenditure as of June 2018.

The amount paid to the supplier of faulty cylinders had not been recovered even as the Consumers Federation of Kenya and the Ministry were allowed to appoint an independent inspector to ascertain their suitability.

For the Judiciary, MPs have called on the DCI to carry out investigations and provide a status report to Parliament on the loss of Sh9.34 million at the Milimani law courts.

This should be done within three months of the report's adoption.

An audit revealed Milimani law courts lost money through receipting of fees using parallel and fake receipts at the Environment and Land registries.

The PAC said the Judiciary has not made any efforts to punish the concerned officers, recover the monies lost and reconcile the financial statements.

“The accounting officer has not reported and/or instituted any civil proceedings against the officers,” the committee said.   

For the Treasury, MPs want the EACC to initiate a forensic investigation into the procurement for services of cash management solutions.

The lawmakers also resolved that Oracle — a database services provider — and its associates be barred from doing any business with the government if found culpable for bid-rigging in the tender.

The Treasury through restricted tender contracted and paid the supplier to implement a cash management solution for the 48 governments at Sh35 million.

A review of the contract implementation status as of the date of finalising the audit indicated that the project was incomplete.

MPs also want the Public Service Commission to investigate the Treasury’s administration and personnel practices. It discovered seven officers are under contract yet have hit the mandatory retirement age of 60 years.

The PSC probe would be carried out with a view to determine how many persons beyond the stipulated retirement age are still in service.

“PSC should revoke any acting or substantive appointment for any person that is 60 years or older and is not registered as person with disability,” the report said.

At the Education ministry, MPs want the EACC to expedite investigations into an overpayment of Sh103 million in disbursements to public secondary schools.

The money is part of funds to 185 secondary schools in 11 sampled counties where enrolment data was inflated.

The concerned department explained the officer was interdicted for alleged involvement in the data entry that resulted in the variance between the enrolment data submitted by schools and the data it used.

PAC revealed that two non-existent schools in Kakamega received a total of Sh11 million, and directed the EACC concludes the probe in three months.

MPs recommended that the officer — Joshua Ocharo Momanyi —and any other public officers or entity found culpable be duly prosecuted for the misconduct that led to wasteful expenditure.

Momanyi, a former clerical officer at the Directorate of Education Offices in Kakamega, is accused of creating the non-existent school — Mundeku Secondary School — in the disbursement schedule.

The man was a signatory to the fictitious school account held at Equity Bank, Kakamega branch.

In the Sports ministry, the PAC has invited the EACC to probe advance payment of Sh330 million paid to Auditel Engineering and Services for installation of security, access control, communications, audiovisual and pitch lighting systems in stadiums.

MPs want a probe against the entity and all its directors over their engagement with the Sports department on the questionable contract.

“Upon establishing any criminal culpability, the EACC should make appropriate recommendations to the DPP without undue delay,” the Wandayi-led committee said.

The company was awarded the Sh1.6 billion contract in September 2017, works that were to be completed within four months.

It involved remodeling of five stadiums including Jomo Kenyatta Stadium in Machakos, Moi Kinoru Stadium in Meru, Kipchoge Keino Stadium in Eldoret, Nyayo Stadium in Nairobi, Kasarani Stadium in Nairobi and 10 training pitches that were earmarked for use during the CHAN 2018 Championships.

Lawmakers said the guarantee against risk of loss of the cash at the bank had expired and had not been replaced.

“It is also not clear when and if the project will be completed considering the National Treasury withdrew the funding,” the PAC report reads.

Upon receiving Sh330,537,997, Auditel disappeared. Efforts to trace it have been unsuccessful.

“The committee was totally unable to locate the company and its promoters," the report said.

(Edited by V. Graham)