Loopholes that led to housing scandal

Saturday July 7 2012

A National Housing Corporation housing project in Langata. Photo/FILE

A National Housing Corporation housing project in Langata. Photo/FILE 

By SAMUEL SIRINGI [email protected]

Senior government officials at the Housing ministry sharply differed over a move to suspend top officials of a state corporation at the centre of a controversial allocation of houses.

A new document prepared by the Kenya National Audit Office (Kenao) raised questions as to why Housing assistant minister Margaret Wanjiru and Permanent Secretary Tirop Kosgey were split over the plan to suspend senior officials at the National Housing Corporation (NHC).

The officials were company secretary Elizabeth Mbugua, senior legal officer William Keitany and senior estates officer Lilian Muinde.

Mr Tirop wanted the three officials suspended in the face of two reports of the Board Audit Committee (BAC) that claimed there had been impropriety in the allocation of houses in various schemes at the corporation.

The Auditor General’s office, in a letter dated June 22, states that Mr Tirop wrote to the corporation’s managing director James Ruitha asking that the three be suspended over the allocations scandal.

But soon after Mr Tirop’s letter went out, Ms Wanjiru wrote to the PS stating that “no such action (of suspension) was agreed and therefore no officer should be sent on compulsory leave”.

Kenao which moved in to conduct its own investigations said the officers were still in office.

“This indicates that even the parent ministry is not reading from the same script,” the Kenao document said.

“Such action further gives doubts as to the credibility of the BAC report, and board meeting resolutions on the said report.”

According to the document, there had been many loose ends in the BAC reports that made it unreliable.

“We found the report not reliable and we have proposed to use it as a guide while we carry out our own independent investigations (audit) on this matter,” said the report signed by Mr P.G. Gichuki for the auditor general.

The audit office becomes the latest government agency to introduce another twist to the house allocations exercise at the corporation, by also trashing BAC reports arguing they had many loopholes.

Two weeks ago, the Inspectorate of State Corporations pointed out that senior government officials including three permanent secretaries and Ms Wanjiru had been allocated houses by the corporation.

They included Dr Mohammed Isahakia (PS, office of the Prime Minister), Ms Dorothy Angote (Lands PS) and Ms Mary Ngari (Medical Services PS).

Former State House Comptroller Hyslop Ipu was also allocated a house.

The audit also discovered that present and former members of the NHC board allocated themselves as many as five housing units.

But the report said the prevailing house allocation policies had loopholes that were exploited leading to multiple allocations.

But another report by the Efficiency Monitoring Unit (EMU) in the Prime Minister’s office ruled that Ms Wanjiru and Ms Angote were regularly allocated their houses.

Ms Wanjiru was allocated a house in Langata II under her own name and another in Kileleshwa under the Jesus is Alive Ministries that is associated with her.

The EMU report also said NHC chairman Bosire Ogero was regularly allocated houses under various purchase schemes meant for the public.

According to the unit’s Report on Allegations of Impropriety in Allocation of Houses by the NHC dated June 2012, Ms Angote was regularly allocated two houses in Nairobi West and Kakamega.

“She had complied with all requirements warranting allocation of the houses,” the report said.

The report recommends that Housing minister Soita Shitanda should not revoke the controversial allocations of the houses, including those that have yet to be handed over to purchasers.

It argued “due process was followed as per existing policies which do not limit the number of houses” one can purchase. Revocations could attract many court cases, the report said.

According to the report, there were no policies limiting the number of houses an individual could be allocated before 2005.

The investigation team found out that three members of the corporation’s Housing Allocation Committee (HAC) had been allocated 36 houses between them and staff.

Of the three, one woman had six houses between her and relatives while a male member had eight houses.

One of them, a female worker, had taken up 19 houses between her and relatives, including a girl aged seven years who was said to have bought a house in 1996.

Identity documents availed to investigators indicated that the girl was born in June 30, 1989, and therefore was aged seven at the time of she purchased a house at Nyayo Estate Phase II Kibera in February 1996.

The girl allegedly wrote a letter and signed it requesting the house, which was offered.

She also bought a second house in Langata Phase II in January 1, 2008, upon attaining a national identity card.

The girl was among relatives who have been awarded 19 houses among them.

The unit’s report shows that 14 per cent of NHC staff own more than one house under tenant scheme.

“Lack of clear and concise procedures, systems and instruments for disposal or allocation before June 2005 enabled the HAC members and the board to take advantage of the void to acquire more houses in the range of between five and 10,” the report said.

Even after 2005, HAC had no provision of limiting houses a member of the public or staff should purchase, according to the report.

The report faulted another prepared by the corporation’s board arguing it did not seek to separate living and non-living entities in the purchase of houses.

For instance, the board report did not treat Ms Wanjiru’s house allocated under her name and that bought under the Jesus is Alive Ministries that is associated with her.

It accuses the members of the housing allocation committee of conflict of interest and falsification of documents in a bid to influence the sale of houses.

Nonetheless, the EMU report said the allocations were given in line with stipulated procedures. The team found out that some people who did not work at the firm ended up owning an average of two houses.

The distortion in house allocation, said the report, was attributable to insider information provided by house allocation committee members, sheer lack of guidelines and failure by policies to provide any form of limitation as to the number of houses one ought to have.

The EMU team recommended that the Housing ministry limit the number of houses staff can acquire to only two since they always stood to gain the advantage of being insiders.

In the meantime, the team asked that the Housing ministry allows beneficiaries of the allocation schemes to hold onto their houses.

“The reasons for recommending the minister of Housing not to revoke or direct immediate vacation recommendations of the board are informed by the fact that there was an offer, acceptance and contract signed between the parties,” the report said.

“Due process was followed as per existing policies which did not limit the number of houses one could be allocated.”