Amorphous consultancies the new trend for stealing taxpayer billions

Amorphous and easy to explain away, consultancies are the new vehicle that crafty public officials are using to steal taxpayers’ money.

While some of the work is charged at extortionist rates disproportionate to the work done, some consultants are paid millions of shillings for doing nothing beyond colluding with rogue State officials to dream up phantom jobs.

Stealing through consultancies is turning out to be the common thread in many of the corruption allegations the Jubilee government is grappling with, the latest being the loss of at least Sh180 million at the Youth Enterprise Development Fund (YEDF) currently being investigated by the National Assembly.  

“Consultancies in government are pretty much unregulated. For instance, lawyers would charge the government double or triple what they would ordinarily charge citizens,” Mr Samuel Kimeu, the executive director of Transparency International Kenya, said.

Nowhere is this best demonstrated than at the Youth Fund, where suspended CEO Catherine Namuye apparently single-handedly signed off Sh180 million to Quarandum Ltd for what appears to be non-existent ICT consultancy.

The same project had been done by another company, Microflex, in 2013 at a cost of Sh5.9 million. But in 2014, having been appointed the sole signatory by board chairman Bruce Odhiambo, Ms Namuye allegedly “confidentially” awarded a similar consultancy contract to Quarandum Ltd.

DEVOLUTION MINISTRY

Similar questions had been asked at the scandal-ridden Devolution ministry under then Cabinet Secretary Anne Waiguru when it emerged that Mr Mutahi Ngunyi had been paid at least Sh38 million - but he himself suggested he could have been paid more - to develop a five-point plan for the National Youth Service (NYS).  

It appeared a similar job had been done by the NYS Review Task Force that was gazetted on May 26, 2007 (Kenya Gazette Vol. CIX No. 36) and whose terms of reference were to: Review the objectives of the NYS Act and their relevance to present day Kenya; propose amendments to the Act in view of the changing youth agenda in Kenya; examine the institutional reforms internally proposed by the NYS; and review the curriculum followed at the basic training school, among others.

Ms Waiguru, who resigned last November and is under investigation by the Ethics and Anti-Corruption Commission over the loss of Sh791 million at NYS, is also said to have hired tens of advisers and consultants to work in her office for roles that could be performed by civil servants.

The Devolution ministry had also retained public relations companies as media advisers, including IMG Events & PR and Transcend Media Group (TMG).

TMG, for instance, received Sh49.6 million in May 2015 “in respect of event concept cost for hosting Kibera Youth Empowerment Programme” - a presidential function that lasted only a few hours.

The same company was paid Sh7.9 million for publicity and roll-out of NYS re-branding and Sh48.9 million for delivery of an interim report on consultancy on NYS rebrand contract.

In January 2015, TMG was also paid Sh71.2 million for “publicity roll-out of National Youth Service Re-branding” and “implementation of NYS media flighting” and a further Sh32.6 million “for offering consultancy services for the rebranding of NYS.”

Another consultant, Brand Associates, was paid Sh114.9 million “for re-branding of National Youth Service media buying” and “provision of consultancy services on media buying, documentation and communication for the public benefits organisation task force.”

TMG has, however, maintained in a recent statement that it was paid for work done and was not involved in any corrupt dealings.

On Thursday, Mr Kwame Owino, the chief executive officer of the Institute of Economic Affairs (IEA), stirred debate on Twitter when he posted: “I am surprised at how consultants confidently quote prices but can hardly state the basis for amount of work. Is pricing #KE based on guesswork”.

And the millions spent on consultants do not end with YEDF and NYS. The government in 2014 paid close to Sh1 billion to Israeli firm Green Arava for feasibility studies on the stillborn one-million-acre Galana-Kulalu irrigation scheme.

“The consultant (Green Arava) went ahead to win a Sh14.5 billion award to implement the model farm whose benefits we have never realised,” National Assembly agriculture committee member Opiyo Wandayi told the Sunday Nation.

Even after spending billions on the consultancy and implementation, the government got 10 bags of maize per acre out of a targeted 40 bags.

Eliud Owallo of Eliud & Associates, who is also an Opposition politician, said there are clear guidelines on any work done.

“I am a private consultant but I don’t know how these people are making insane amounts of money. You cannot hire a consultant amorphously. There must be terms of reference, the expected outputs and a clear work plan for executing the job.

These consultants you are referring to and the government agencies should be able to provide this information,” said Mr Owallo.

PUBLIC PROCUREMENT AND DISPOSAL ACT

He also noted that there should be competitive bidding in sourcing consultants, according to the Public Procurement and Disposal Act.

“If there was competitive bidding, can the government agencies concerned provide the authenticated list of firms that responded? What were the results of the technical and financial evaluations? Single-sourcing a consultant or any form of procurement is illegal unless the procuring entity can prove a just cause for that,” he said.

Lawyers have also not been left out of the controversy, with some accused of charging exorbitant fees for their services.

Such incidents point to abuse of consultancy in government with the perpetrators using it to cover up their financial greed.

There also appears to be a mushrooming of briefcase consultants as crafty government officials devise new ways to steal public funds.

“People collude and overcharge simply because there is no guidance on how much the government should pay consultants for particular services,” added Mr Kimeu.

Besides the ones that have been blown open, the government to date retains hundreds of advisers and consultants.

They form the category of the super-paid public servants largely made of campaign financiers and political loyalists, and close family members of the people in power.

“Increasingly, the government is using consultants and advisers at the expense of civil servants. This will remain the case unless someone comes up with regulations on use of consultants,” said Mr Kimeu.