Audit reveals Sh1.7bn Sports ministry scam

Wednesday August 22 2018

IAAF Nairobi

Kenya fans during the IAAF Under-18 World Athletics Championships at Kasarani Stadium, Nairobi last year. An audit report shows that half of the money the government pumped into the event was misappropriated. FILE PHOTO | NATION MEDIA GROUP  

DAVID MWERE
By DAVID MWERE
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AYUMBA AYODI
By AYUMBA AYODI
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Half of the money the government pumped into the IAAF Under-18 World Youth Championships in Nairobi last year was stolen in yet another plunder of public funds.

The loss of Sh1.7 billion out of an allocation of Sh3.5 billion comes close to the theft of Sh9 billion from the National Youth Service over the past two years in sheer audacity.

While money at the NYS was lost through payments for supplying air, theft of the IAAF funds was perpetrated through single-sourcing, undelivered supplies, and lack of documentation. And there is still Sh138 million in pending bills to be paid.

AUDIT

The revelations by Auditor-General Edward Ouko bring to two the number of high profile scandals involving hosting of sports events in the country.

The first was 40 years ago, when a dubious marketer named Dick Berg conned organisers of the All Africa Games in 1987 more than Sh60 million.

Mr Ouko’s report comes only a month after the International Association of Athletics Federations (IAAF) handed Kenya the rights to host the 2020 IAAF World Athletics Under-20 Championships following what was, on the surface, a largely successful World Under-18 Championships, with a record 60,000 fans thronging Kasarani Stadium.

Principal Secretary for Sports Kirimi Kaberia said in a telephone interview that he will only give a comprehensive statement after looking at the report.

He, however, noted that Kenya would not have successfully hosted such a high magnitude event had Sh1.7 billion been lost from a budget of Sh3.5 billion.

“It’s simply not possible, considering the amount of work that was put into the event,” said Mr Kaberia. “But, with all sincerity, I’d like to look at the report to give an informed statement. There is really nothing to hide.”

World Under-18 Chief Executive Officer Mwangi Muthee, who spoke on phone from London, said all the procurement and accounting procedures were done by officers from the Ministry and Sports.

 “We only recommended, but it’s the ministry and Sport Kenya who decided who to engage or pay,” explained Mr Muthee.

However, Mr Muthee disclosed that they saved up to Sh450 million from the budget of Sh3.5 billion, which the ministry and Sports Kenya should account for.

“You can extract the Sh150 million which we still owe suppliers and see how much we remained with,” said Mr Muthee, adding that several independent committees were formed to handle various issues.

WARIO

Efforts to get comments from Mr Hassan Wario, who was the Cabinet Secretary for Sports, Arts and Culture at the time, were futile as his phone went answered. Mr Wario is now Kenya’s ambassador to Austria, having been replaced by Mr Rashid Echesa at the ministry.

The latest revelation adds to the litany of questionable payments made by the government at a time it is struggling to make ends meet. With tax collections falling short by Sh84 billion in the last financial year, the government has been bingeing on debt to fund key projects.

The July 10 report of the Auditor-General, tabled in the National Assembly by Leader of Majority Leader Aden Duale, shows that the State Department for Sports and Development was allocated Sh1.7 billion, Sports Kenya Sh1.1 billion and Kenyatta University Sh689.6 million in preparation for the championship.

The National Assembly Public Accounts Committee, chaired by Ugunja MP Opiyo Wandayi, will consider the report, which shows that Sh349.6 million was incurred through direct procurement, against the Public Procurement and Disposal Act of 2015.

HIGH PRICES

About Sh66 million was controversially set aside for the procurement of taxi services, and Pewin Cabs Ltd was paid Sh23.8 million above the market rate, the report says.

“This company was also given a dry cleaning and laundry services contract valued at Sh30.8 million,” he adds.

The organising committee, through the ministry, incurred expenditure of Sh204 million that was not supported with relevant documents. The questionable payments included Sh67.5 million to Patel Studio for the procurement of media agency services and Sh70.5 million to Inter Management Group for marketing of the games. In both instances, there were neither adverts to invite proposals nor evaluation reports as required by the law, says the report.

About Sh13.9 million was used for the purchase of a Toyota Landcruiser Prado from Toyota Kenya Limited, and Sh19.6 million for three Nissan Urvan vans.

However, the auditor did not find any vehicle logbooks, inspection certificates and physical verification reports to ascertain if the cars were bought.