• EPRA attributed the non-occupancy to ongoing renovations.
• The Authority acquired the space in July 2020.
Image: HANDOUT
The Energy and Petroleum Regulatory Authority managers are in the spotlight following revelations the authority spent Sh6.6 million on an unutilised office space.
A new audit report says EPRA paid Sh6.6 million in rent but did occupy the office that has been idle since July 1, 2020.
Auditor General Nancy Gathungu said in her report that at the time of the audit in March this year, the space remained unoccupied.
The Daniel Kiptoo-led authority attributed the non-occupancy to ongoing renovations.
“According to the management, the non-occupancy was a result of long period of partitioning, fittings and remodeling of the office to conform to the authority’s needs and brand,” Gathungu said.
“In the circumstances, the Authority did not obtain value for money on the expenditure,” she stated in a report recently tabled in Parliament.
The auditor has also queried EPRA’s failure to remit surplus funds amounting to Sh240 million to the Kenya Revenue Authority.
KRA, through a notice dated August 25, 2020 demanded the remittance of surplus funds.
However, EPRA, the auditor says, failed to remit the funds contrary to the public finance law on dividend policy and surplus funds.
KRA, in a November 6, 2020, letter, asked EPRA to pay tax owed amounting to y Sh276.7 million.
On enquiry by the auditor, EPRA explained they had communicated with The National Treasury, indicating that they cleared the issue.
Gathungu has cast doubt on the explanation, saying she was not provided with official communication from KRA confirming the clearance of the issue.
“No official communication was provided for audit. In the circumstances, management was in breach of law,” she said.
Also flagged is an unexplained excess expenditure of Sh65 million on a contract for monitoring domestic kerosene.
Tender documents showed that the contract was awarded to a company in March 2019 at Sh68.5 million.
However, the authority has made two payments totalling Sh133 million, way above the awarded cost of the petroleum fuels marking and monitoring services contract.
Gathungu further says the energy regulator is exposed to risks of additional costs after committing to bear the cost of services offered to independent and unbranded retail stations.
“In the circumstances, value for money for the contract could not be confirmed,” the auditor said.
Another firm was overpaid by Sh13 million for inspection of LPG storage and cylinder contract.
The company was awarded the two-year contract in March 2019 at Sh35.8 million, but was extended by one year for another Sh35.8 million.
Gathungu said the authority was in breach of the law, amid revelations the firm has been paid Sh85 million since the inception of the contract.
A consultancy expenditure of Sh10 million has also been flagged. The tender was awarded in June 2019 at Sh17 million.
“However, management did not provide documents to support payment of Sh10,245,718 for audit,” Gathungu said.
The auditor has also flagged a variance of Sh114 million in employee costs.
EPRA stated it paid salaries of Sh630 million but a review of the payroll indicated that the total cost was Sh516 million.
(Edited by V. Graham)