Auditor-General Nancy Gathungu has flagged a Ksh2 billion expenditure by the Kenya Power management in the fiscal year ended June, without the National Treasury’s consent.
She has raised concerns about the company’s haphazard buying of products and services, noting that the organisation risks being sued by suppliers for violating procurement guidelines.
Ms Gathungu claims that Ksh2,060,000,000 in unauthorised expenditures was made on May 4 utilising a corporate board-approved extra budget rather than the National Treasury as required by law.
By June 2022, Kenya Power had spent Ksh860 million on system strengthening, trace maintenance, and transformer repairs, plus extra Ksh1.2 billion to address a staff cost imbalance. According to Ms Gathungu, the state corporation overspent by Ksh9.9 billion over time, spending Ksh167.6 billion instead of the set budget of Ksh146.2 billion.
Kenya Power Stops Banks From Selling Tokens
The administration also decided to spend Ksh153 billion instead of the Ksh146.2 billion budget that had been approved by the National Treasury for recurrent expenses.
The auditor general found various violations in the procurement process. For instance, the supplier quoted a price of Ksh10,846,470 in the tender for the rental of a generator, but the tender assessment committee changed the quoted price to Ksh11,036,759 instead.
She further pointed out that the General Manager of Legal, Regulatory, and Corporate Affairs, not the accounting officer, signed the tender on December 20, 2021, for the supply of insurance services between Pelican Insurance Brokers Ltd and Kenya Power for Ksh651,212.
Other inconsistencies she identified included the contract’s award and prolongation, the execution of unsigned contracts, the use of the restricted tender process, the direct purchase of insurance, the purchase of consulting services, and the purchase of media campaign services, among others.
Justice Aaron Ringera Appointed Kenya Power Non-Executive Director
Ms Gathungu also questioned the qualifications of 36 employees hired last year by the management without following the proper procedures.
The auditor-general stated that a review of staff recruitment during the financial year indicated the appointment of 36 job seekers to be stationed at Wajir, Garissa, Moyale, Mandera, and Daadab stations.
The hiring process, however, did not adhere to the established practices, such as advertising, shortlisting, and interviews before the actual appointment. The job offer letters delivered to the 36 employees were signed on July 6, 2021, yet the application letters from the candidates were postmarked on July 8, 2021, suggesting that the employees were hired before they applied.
The failure of the corporation to report claims of compensation by its insurance for missing merchandise was another concern brought up by the auditor-general.
The corporation had stolen goods worth Ksh8 million during that time, but the insurance only paid out Ksh42,178 in compensation.
Email your news TIPS to editor@thesharpdaily.com
