Auditor queries ‘missing’ billions at CA

Wednesday March 18 2020

Communications Authority of Kenya (CA) Centre in Nairobi. PHOTO | FILE | NATION MEDIA GROUP


Outgoing Auditor General Edward Ouko’s latest report has revealed massive loss of taxpayers’ money at the Communications Authority of Kenya (CA), with billions of shillings unaccounted for.

The authority, which was recently embroiled in vicious boardroom battles following the exit of Director General Francis Wangusi, has been flagged by the auditor general for blatantly ignoring the law on public expenditure.


The queries include Sh2.1 million that the board of directors pocketed for Christmas shopping in form of vouchers without approval from the parent ministry or the National Treasury.

The damning report for financial year 2017/2018 tabled in Parliament on Thursday indicates the authority could not explain the whereabouts of Sh2, 631,195,000 indicated in its books as general expenditure.

The general expenditure items  that the auditor queried include training, enforcement, computer software maintenance, corporate affairs, consumers and medical.


The agency also failed to account for Sh26 million it received as annual frequency licence fees as several anomalies were noted during the audit.

According to the audit report, a sample of 17 payments received for frequency licence fees showed there was unexplained and unsupported variance amounting to Sh26 million.

Licence fees

Further, the breakdown of annual operating licence fees of Sh5.9 million contained negative entries totalling to Sh802,975, for which the auditor says no valid explanation was provided.

Mr Ouko further says in his report that invoices raised in the month of June 2018 amounting to Sh1.3 million in respect of annual frequency and Sh3 million in respect of annual operating licences included in the payments in advance were not provided for audit verification.


One of the authority’s mandate is licensing all systems and services in the communications industry.

The systems include telecommunications, postal, courier, broadcasting and managing the country’s frequency spectrum and numbering resources.

A total of Sh53 million paid to directors at the authority has also been questioned by the auditor.

Specifically, Sh3.3 million was paid to the directors on a monthly basis for broadband but the details were not provided for audit verifications.

In addition, the auditor says the payments advanced to the directors were illegal as they went against the State Corporations Act and Mwongozo guidelines.

There is a further Sh1.1 billion that was paid to employees in form of travel allowances, house benefits and perks but the auditor general says the payments were not authorised and ought not to have been made as no board meeting authorised them.

The report further indicates there was no budgetary allocation and the minutes of the board approving the payments were also not produced for audit verification.


The authority, according to the report, blew Sh13 million of taxpayers’ money in a one-day event in November 2016 during the organisations ICT forum.

According to the report, the authority procured a service provider for the event but ended up spending Sh13 million instead of the allowable threshold of Sh2 million.

“There was no signed formal contract between the authority and the service provider provided for audit review,” reads the audit report.

The authority further paid Sh20 million to another firm in respect of an event dubbed “Kikao Kuu” in Busia County without a signed contract agreement, contrary to section 44(1) of the Public Procurement and Asset Disposal Act, which requires an accounting officer to approve and sign all contracts on behalf of the procuring entity.

The auditor general has also questioned Sh11 million that was used in the design, printing, supply and delivery of branded give-aways such as umbrellas and spiral notebooks.

Mr Ouko questioned why the three firms, which were contracted to deliver the giveaways, were identified through request for quotations instead of open tendering.

The report also indicates that the authority did not clearly explain Sh2,753,219 in relation to employee costs.