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Auditor General queries Sh5.3b KICC spending

Mercy Mwai @wangumarci

Taxpayers may have lost Sh5.3 billion to questionable transactions by the Kenyatta International Convention Centre (KICC) management.

Auditor General Edward Ouko latest audit report, tabled in the National Assembly Majority Leader Aden Duale yesterday, raises queries on KICC expenditure and tendering process. It also emerged that the landmark building sits on land registered in another name.

Part of the funds that cannot be accounted for is Sh1.4 billion used to host 10th World Trade Organisation (WTO) Ministerial Conference in 2015. The other Sh3.9 billion is value of assets, whose last valuation the report says was conducted 11 years ago, thereby contravening the International Public Sector accounting standards which stipulate that property, plant and equipment should be valued after every five years.

On WTO meeting hosting, Ouko indicted the then KICC chief executive officer for single-sourcing and making non-existing bids when awarding tenders for services to facilitate the conference. The auditor also fingered the board of directors for their involvement in flawed procurement process on grounds that they participated in the revision of cost of design, supply and installation of computerised conference management systems.

The board was further put on spot because despite constituting an ad-hoc committee to oversee the implementation of WTO tenders, no report was prepared for consideration by the full board despite the manner in which the projects were initiated and implemented.

Ouko said a review of the procurement process during the WTO conference disregarded the Public Procurement and Disposal Act  and the Public Procurement and Disposal Regulations 2006.

Auditors were not provided with procurement records, including minutes of the tender committee meetings, contract documents and local purchase orders /local service orders for verification.

“From the foregoing, the corporation was clearly in breach of procurement laws and may not have received value for money from WTO projects through flawed procurement processes,” read the auditor’s report in part.

Out of the 17 tenders awarded during the WTO period, only five had invitations for bids. The rest were single-sourced by the then CEO on diverse dates between July 13, 2015, and September 30, 2015, to the tune of Sh1.4 billion. Former CEO Fred Simiyu was interdicted on November 27, 2015, two weeks before the WTO ministerial conference kicked off on December 15.

In the report, Ouko regretted that information available to him revealed that only five of the 15 companies had signed contracts amounting to Sh894.9 million, while six of the tenders were canceled due to delay in release of the funds and in some instances award letters were terminated but the signed contracts were not terminated, exposing KICC to litigations and resultant costs.

A local company, the audit says, had signed a contract worth Sh69.9 million yet it had not been issued with an award letter, while another undertook some partial works and submitted a claim of Sh9.9 million without award letter or signed contract. The said company was not registered.

On outstanding debts, Ouko said KICC is owed Sh696.6 million, which has been outstanding for over a year. Bulk of the debt is owed by various ministries and departments, including the National Assembly which owes the KICC Sh47.3 million as well as Sh60.6 million owed by defunct government ministries.

Also questioned by the Auditor General is Sh20.8 million used to buy three vehicles which were registered in the name of the KICC Management Limited and not in the name of the corporation.

Further Ouko also raised concern over land estimated at Sh1 billion which he said excludes land known as Comesa parking areas and courtyard as well as the disputed land on which garden square restaurant sits.

The auditor’s report comes barely a month after KICC moved to court seeking to stop multiple companies from auctioning its properties over Sh716 million pending bills.

The companies are seeking payments for services provided during WTO meeting. KICC says it faces multiple claims where some service providers have already obtained warrant of attachment to auction its properties while some have obtained favourable arbitration awards.

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