Non-adherence to procurement laws and Independent Electoral and Boundaries Commission (IEBC) own procedures, including plenary resolutions, delivery of goods out of time and missing tender documentations, are the key issues raised in the internal audit, the basis on which the chief executive officer Ezra Chiloba was sent on compulsory leave.
A copy of the internal audit is among the documents Mr Chiloba has attached as exhibits to his petition through which he is seeking to quash IEBC’s decision to send him on compulsory leave pending external audit by the Auditor-General.
“The assignment has established, in some cases, non-adherence to procurement laws, rules, regulations, laid down procedures, and guidelines as well as plenary resolutions in procuring services, products and goods,” the internal auditor’s opinion reads.
In his defence, Mr Chiloba has stated in his affidavit that he was ambushed as he was not afforded an opportunity to respond to the issues raised in the report.
In any case, he says the report was never handed to him and the one he has was obtained from his deputy and now acting CEO Marjan Hussein Marjan.
Three IEBC commissioners Wafula Chebukati (chairman), Prof Abdi Guliye and Boya Molu on April 6 voted to send Mr Chiloba on a three-month compulsory leave to allow for “a comprehensive audit of all major procurements relating to the 2017 general and fresh presidential elections”.
Two commissioners, vice chairperson Consolata Maina and Dr Paul Kurgat had walked out of the meeting when the matter of sending Mr Chiloba on forced leave came up in the plenary.
In a letter dated April 9, Ms Maina tells Mr Chiloba that “I was not at the meeting where ‘additional resolutions’ were made. I am made to understand only the chairman and two commissioners were present.”
The audit reveals that IEBC entered into an agreement with OT-Morpho to reconfigure the Kiems kits based on a performance guarantee that had expired with the August 8 elections.
The guarantee amounting to $4 million (Sh403 million) expired on August 15, seven days after the general election.
“It was therefore not valid by the time the amendment to the agreement was entered into on September 28, 2017,” the audit states.
The audit observed that without a valid performance guarantee, IEBC was exposed and cannot be compensated for the failures by the reconfigured kits.
Without a performance guarantee, the contract for the October 26 repeat presidential election was purely based on a gentleman’s promise and trust that the kits would work with IEBC having no recourse in case of failure.
“This was in contravention of PPADA (Public Procurement and Asset Disposal Act) 2015 Sec. 142(1).”
The report recommends that the commission’s department of procurement “be tasked to explain why they did not secure the contract with performance security as stipulated in PPADA 2015 Sec. 142(1).”
Also, the audit raises questions about non-performance of the full contract since repeat election was not held in all constituencies.
“A review of the procurement records revealed that there was no project signoff report/contract implementation and performance report available for review. This is contrary to PPADA 2015 Sec. 150(3),” the audit states.
The audit recommends that the accounting officer (Mr Chiloba) and the directorate of ICT be tasked to explain whether the contractor met the milestones and the whereabouts of the contract implementation and performance contract, respectively.
The audit also reveals that even though mobile service provider, Airtel Kenya, had formally indicated that they could only provide 1,000 Thuraya IP satellite devices for the August 8 elections, the delivery schedule shows they went ahead to supply 1,553 devices.
Airtel delivered the last batch of the devices, 553, on August 25, 2017, more than two weeks after the elections.
“They therefore did not serve the purpose with the focus of the procurement being the General Election,” the audit notes.
Despite the anomaly, IEBC on December 2017 paid the mobile services provider Sh639 million, representing 70 per cent of the contract price while the balance of 30 per cent was in the final stages of being paid with only the Exchequer disbursement awaited.
The internal audit has also revealed that IEBC awarded Oracle Technology Systems (Kenya) Ltd tender worth Sh439 million for Server Infrastructure Maintenance & Infrastructure Security Monitoring Solution without a contract.
“Instead, signed ordering documents drawn by Oracle Technology Systems were provided,” the report notes, adding that the ordering documents “contained mainly description of services and deliverables, licensing rules, payment details, among other details”.
“Normally, a contract drawn by IEBC contains General Conditions, for example inspection and tests, sub-contracts, termination for default, liquidated damages, resolution of disputes, limitation of liability and special conditions, for example performance security, in line with Section 135(6) of the PPADA 2015.”
Despite lack of a contract, Oracle has been paid Sh80.7 million being first instalment of the contract price.
The same however has not been captured in the IEBC’s Vote Book Certificate as required by Public Finance Management Act Section 103(2).
Yet another contract that is the subject of the audit was the one IEBC awarded Scanad Kenya Ltd for strategic communications and media campaign, which included among others, traditional and social media campaigns and voter education.
The audit faults the secretariat for engaging in negotiation with Scanad and Transcend Media Group Ltd who had quoted 118 per cent and 36 per cent above the commission’s budget of Sh350 million.
Other than Mr Chiloba, the directorate of ICT, the directorate of supply chain management and the department of procurement are among those the audit says should be called to respond to the audit issues raised.