- The fisheries department paid Sh11.3 million rent for an office that remained unoccupied for 21 months, an audit shows, underlining wastage of taxpayer funds.
- Auditor-General Nancy Gathungu says the department spent Sh11,295,260 to rent office space on the 13th floor of the National Hospital Insurance Fund (NHIF) Building for the Kenya Fisheries Service (KFS) for the financial year 2018/19 and the last two quarters of the financial year 2017/18.
The fisheries department paid Sh11.3 million rent for an office that remained unoccupied for 21 months, an audit shows, underlining wastage of taxpayer funds.
Auditor-General Nancy Gathungu says the department spent Sh11,295,260 to rent office space on the 13th floor of the National Hospital Insurance Fund (NHIF) Building for the Kenya Fisheries Service (KFS) for the financial year 2018/19 and the last two quarters of the financial year 2017/18.
“An audit verification exercise carried out on November 25, 2019 revealed that the office space remained unoccupied for twenty-one months from February 1, 2018 to date and only the boardroom was found to be in use,” the Auditor-General said in a report dated October 6, 2020.
Ms Gathungu says although the State Department explained that the payment was made to reserve the office space and delay in occupancy was occasioned by unavailability of budget to procure furniture, the explanation is not satisfactory in regard to the time and expenditure incurred.
“This contravenes regulation 43(d) of the Public Finance Management (National Government) Regulations, 2015 which requires an accounting officer to manage, control and ensure that policies are carried out efficiently and wastage of public funds is eliminated,” she said.
Ms Gathungu said out of the total expenditure of Sh11,295,260, only Sh4,428,147 relating to the occupancy for two quarters effective from February 1, 2018 to April 30, 2018 and May 1, 2018 to July 31, 2018 were supported with documentary evidence of cash book entries and payment vouchers maintained by the State Department for Fisheries, Aquaculture and Blue Economy.
The remaining amount of Sh6867,113, though traceable from the Integrated Financial Management Information System (IFMIS) records was not supported with documentary evidence such as payment vouchers.
“Consequently, the propriety of expenditure totaling Sh11,295,260 incurred on rentals of produced assets, could not be ascertained,” Ms Gathungu said.
The Auditor-General also questioned the State Department’s decision to procure goods from unqualified firms. She said the Department spent Sh4,593,482 on routine maintenance services for other assets and Sh85,445,298 on specialised materials and services.
“An examination of payment records at the Mombasa office revealed that a firm was paid Sh276,312 for maintenance services that involved fixing of floor tiles and repair of a submersible pump,” Ms Gathungu said.
She said the firm presented a Tax Compliance Certificate (TCC) number KRANER8309392017 dated September 20, 2017 whose expiry period was indicated as June 22, 2019.
“However, a verification from the KRA (Kenya Revenue Authority) website TCC checker shows that the certificate had expired on September 19, 2019, implying that the compliance certificate was a forgery,” Ms Gathungu said.
In addition, the procurement and payment records show that another firm was issued with a Local Purchase Order number 2466456 dated March 29, 2019 and paid Sh1,130,000 for supply of fishing gears at the Mombasa office.
However, the firm provided an invalid Tax Compliance Certificate number KRAMSN5900842017 which had expired on April 6, 2018.
“These procurements, therefore, contravened section 55(1)(f) of the Public Procurement and Asset Disposal Act, 2015 which stipulates that a person is eligible to bid for a contract in procurement, only if the person has fulfilled her/his tax obligations,” Ms Gathungu said.