- A cash strapped State Department has put taxpayers’ money in excess of Sh250 million at risk of sinking in stalled projects.
- Auditor General Nancy Gathungu has revealed that the State Department of Devolution is sinking the cash in the stalled construction of a multi-purpose convention center in Kisumu.
Image: FILE
A cash-strapped State Department has put taxpayers’ money amounting to Sh250 million at risk of loss in stalled projects.
Auditor General Nancy Gathungu has revealed that the State Department of Devolution is sinking the cash in the stalled construction of a multi-purpose convention centre in Kisumu.
Gathungu disclosed that the Sh890.82 million Africities Convention Centre has stalled, putting at risk Sh250 million that has already been pumped into the project.
The project is being undertaken by the State Department, which is currently domiciled in the office of Deputy President Rigathi Gachagua.
Initially, it was under the Ministry of Devolution.
According to the report, the contract for the project was awarded on July 16, 2021, for a duration of 38 weeks.
However, the contract was reviewed and the completion period was extended to 73 weeks, ending December 16, 2022.
“However, physical verification carried out in the month of November 2022 revealed that the project was 55 per cent complete,” the report shows.
According to the state department, the project was delayed due to lack of funds. But the Auditor now says that Kenyans may not get the value for the Sh250 million already pumped into the stalled project.
“In the circumstances, the regularity and value for money realised from the expenditure of Sh250 million incurred on the delayed project for the year ended June 30, 2022, could not be confirmed,” the report reads.
Last year, Kisumu City played host to the 9th Africities Summit.
Africities is the United Cities and Local Governments of Africa's (UCLG- Africa) flagship pan-African event that is held every three years in one of the five regions of Africa.
It focuses on the need for Local Africa to learn, promote and present a new approach to sustainable development.
In what lifts the lead on the financial crisis that has hit the department, Gathungu revealed that the Department is grossly underfunded.
During the year under review, the National Treasury failed to disburse some Sh466.12 million to the Department.
The department got Sh4.33 billion of a budget of Sh4.80 billion.
“The underfunding affected the planned activities and programmes of the State Department which may have impacted negatively on effective service delivery to the public,” Gathungu said.
Further, Gathungu discharged that the Department has accumulated pending bills amounting to Sh1.37 billion.
“The management has not explained why the bills were not settled during the year when they occurred,” the report reads.
The state department, the auditor stated, is at risk of incurring significant interest costs and penalties with the continued delay in payment.
“Further, failure to settle bills during the year in which they relate to distorts the financial statements and adversely affects the budgetary provisions for the subsequent year as the form a first charge."
(Edited by Tabnacha O)