The Communications Authority of Kenya (CAK) has come under scrutiny from parliamentary auditors over unexplained variances in staff payments and undocumented bonus awards totaling millions of shillings.
In a tense hearing before the Public Investment Committee on Social Services, Administration and Agriculture (PIC-SSAA), CAK Director General David Mugonyi was grilled to account for the financial irregularities highlighted in the auditor’s report for the 2017/18 fiscal year.
At the center of the committee’s concerns was an unexplained variance of KES 2,753,219 between the employee costs reported in CAK’s financial statements and the actual analysis of staff expenditure.
“The statement of financial performance and the financial statements reflect an amount of KES 1,140,209,000 in respect of employee costs. However, a monthly analysis of employee costs gives a total sum of KES 1,142,962,219 resulting in an unexplained and unreconciled variance of KES 2,753,219,” said Emmanuel Wangwe, the committee chair, quoting the auditor’s report.
But the more glaring issue was the KES 9,589,055 in bonus payments made to CAK staff without proper documentation or authority, as flagged by the auditors.
“Bonus payments of such magnitude demand stringent oversight. Yet the basis for these awards and the approvals granted were inexplicably missing from your records,” Wangwe told Mugonyi.
In his defense, the CAK chief attributed the variance to long service awards paid through the payroll but charged to a separate budget line. As for the bonuses, Mugonyi cited a human resources policy allowing performance-based lump sum payments of up to three annual increments.
“The lump sums were paid according to our policy, which permits bonus awards equivalent to one or more annual increments for top-performing staff who’ve maxed out their salary scales,” Mugonyi explained.
However, his justifications did little to assuage the committee’s concerns over potential misuse of public funds and lack of accountability at the regulatory agency overseeing Kenya’s multi-billion shilling telecommunications sector.
“While performance incentives are acceptable, the sheer lack of documentation is unacceptable for an authority tasked with regulatory oversight,” Wangwe countered, setting the stage for further probing into CAK’s financial management practices.
