The auditor general wants prosecution of individuals involved in illegal procurement during the 2015 World Trade Organization (WTO) Inter-ministerial Conference held at the Kenyatta International Convention Centre (KICC) in Nairobi County.
The conference was organised by the ministry of Foreign Affairs, whose cabinet secretary at the time was Amina Mohamed. Ms Mohamed, who chaired the conference, is now in charge of the Education ministry.
Recommendations by Auditor General Edward Ouko are contained in a special audit report on Sh1.05 billion WTO projects and pending bills worth Sh450 million.
The audit followed an October 2017 request by the current KICC management, led by CEO Nana Gecaga.
Those implicated in the irregular procurement are Fred Simiyu, who was the KICC Chief Executive Officer at the time, and a retinue of senior managers.
The audit reveals irregularities including falsification of records, overriding of controls, overstepping of mandate, breach of procurement and public financial laws and weaknesses in the KICC's internal control environment.
“There were instances where some supplier accounts were not maintained while others were not reconciled regularly. The cooperation is therefore not in a position to validate the exact amount of its payables. This exposed the corporation to risk of double payments to suppliers,” Mr Ouko says.
He adds: “Contracts and LPOs (local purchase orders) were signed and issued without following procedures as outlined in the Public Procurement and Disposal Act of 2005. There were no tender and procurement committee approvals as required."
The report consequently advises the government not to pay Sh308,267,126 owed to fictitious supplies.
According to the report, goods and services were delivered or rendered without being acknowledged by the supply chain department and the inspection and acceptance committee as required in law.
There were also no competitive tendering processes in some cases as some companies owned by the same board of directors and shareholders competed for the awards, raising the possibility of collusion with the KICC management.
“The companies competed against each other and were awarded tenders, rendering competitiveness of the process and value for money doubtful," the audit report says.
Questions were raised on projects including the refurbishment and modernisation of Tower Block Offices, a contract which was awarded to M/s Greenstar Systems Limited.
It was to cover six floors at a cost of Sh50 million, according to the procurement plan, but the audit reveals that the cost was varied to Sh76,32,500.
Mr Ouko said: “We were availed with neither the bid documents nor the bill of quantities in respect of the works availed during the audit. In the absence of complete procurement process documentation, it is not clear how Mr Simiyu arrived at the figure."
The payment of Sh52 million for the rehabilitation of the KICC fountain has also been questioned as there was no evidence of procurement and execution.
Mr Ouko's report further notes that they were unable to establish the details of the proposed work as no records were provided.
The auditor is also seeking to stop the payment of Sh82 million for the supply of furniture and fittings.
The contract was awarded to M/s Hydro Winds limited during Mr Simiyu’s tenure. Though Mr Simiyu later terminated it citing delays in the release of funds from the National Treasury, the auditors revealed that the company was not among prequalified suppliers or contractors to cater for the WTO project.
Other pending bills the auditor does not want paid include Sh6.5 million for the installation of a centrally managed digital signage system, Sh5 million for video production and live streaming services and Sh6 million for supply of 100mbps bandwidth (three redundant links from different ISPs).