The Office of the Auditor General (OAG), headed by Nancy Gathungu, has cast doubts on the legality of a deal the Ministry of Energy entered with an unnamed Australian company.
In her report covering the 2021/2022 Financial Year, the OAG indicated that the deal was entered in November 2020 with the goal of developing sustainable green industries across the country.
During its investigations, the auditor unearthed malpractices conducted during the procurement process including lack of documentation or statements backing the sourcing and ultimate procurement of the private company.
Gathungu was also concerned about the lack of documentation detailing the need basis of identification of the need for the development of green industries.
She added that the agreement between the two parties was further implemented through a task force whose appointment was not gazetted and the terms of reference for the appointment of the task force members was not documented.
"Due diligence on the company was conducted by members of a task force appointed to oversee the implementation of the Agreement from April 29, 2022, to 16 May 2022, eighteen (18) months after the Agreement had been signed," read the report in part.
"This was contrary to the provisions of the Public Procurement and Asset Disposal Act, 2015 which requires that due diligence be conducted prior to award of tender by the Evaluation Committee."
Whereas each party must nominate at least three representatives to the task force within seven days from the date of the agreement, the Government appointed its representatives on November 17, 2020, 13 days after the Agreement according to Gathungu.
Another glaring issue was the task force's failure to develop the Terms of Reference two years after the signing of the Agreement and the implementation of the Framework Agreement had commenced. The development of ToRs pending approval was listed as one of the clear objectives in the appointment letters.
"In the circumstances, management was in breach of the agreement," added the report.
The auditor further flagged the Energy Ministry, which is now headed by CS Davis Chirchir who took over from Monica Juma for paying lawyers despite all its legal concerns being addressed by the office of the Attorney General as stipulated by guiding laws.
"During the year under review, the Ministry had budgeted to spend an amount of Ksh50,000,000 on legal fees which was later revised to Ksh25,000,000 through a supplementary budget. However, although no legal services were procured during the year, an expenditure of Ksh12,847,512 was incurred under the budget item while commitments amounting to Ksh4,080,205 were made in the vote book and remained outstanding as of June 30, 2022," added the report.
"Further, records held at the legal department indicated that all the Ministry’s legal matters were being handled by the Office of the Attorney General."
The Ministry was also accused of declining to surrender Ksh32 million unspent funds to the National Exchequer.
