BY FRANCIS MUREITHI
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THE Auditor General has called into question President Kibaki’s decision to reappoint Foreign Affairs minister Moses Wetang’ula and Permanent Secretary Thuita Mwangi three weeks ago. The pair stood aside in October last year to allow investigations into the inflated purchase of a new embassy building in Tokyo.
Auditor General ASM Gatumbu in a special audit report on the acquisition of the Kenya embassy in Japan says the government incurred excess expenditure of Sh185 million above the value of Sh1.2 billion approved by the Commissioner of Lands. “All parties and individuals involved in the process of acquisition of the property in Tokyo be held to account for the loss of public funds amounting to Sh185,502,899,” recommended Gatumbu. Gatumbu’s report was tabled in Parliament yesterday.
Prime Minister Raila Odinga is expected to issue a statement today in Parliament over the reappointment of Wetang’ula and his PS. National Assembly Speaker Kenneth Marende is also expected to rule on whether the President breached Standing Orders in the appointments. The Speaker has indicated that he first wants government to explain its actions in Parliament.
MPs led by Defence and Foreign Relations Committee chairman Adan Keynan have accused President Kibaki of taking Parliament for a ride for reappointing the two. The MPs say investigations into the controversial purchase of Kenyan embassy in Japan have not been concluded.
Parliament passed a motion in October last year requiring Wetang’ula and Thuita to remain suspended until investigations are concluded and MPs want the Speaker to rule that the motion is still in force. The MPs have argued that so far no investigating agency has cleared Wetang’ula or Thuita. Wetang’ula stepped aside on October 27 last year after MPs demanded investigations into claims that Kenya lost Sh1.1 billion in the purchase of the Tokyo embassy building.
In his report, the Auditor General said that Kenya paid Sh1.43 billion for the new building but only Sh80 million was paid by cheque and Sh1.35 billion was paid in cash. “Although according to the relevant payment vouchers the total sale amount of Sh 1,430,733,899 was paid to the vendor, the rationale behind transferring the very substantial sum of Sh1,350,000,000 in cash has not been explained,” said the Auditor General.
The audit by the Auditor General was concluded in January 2011. “This mode of payment, as would be expected, materially weakened the transaction trail,” he added. “Proper procurement procedures do not appear to have been followed in the identification and contracting of a number of consultancies, and notably in the provision of valuation and legal services and other support engagements,” the audit report states. “Failure to contract appropriate and suitably qualified professional services and to carry out diligence checks on various firms and parties during various stages of the procurement process exposed the government to considerable risks,” added Gatumbu.
The report said that Sh405,000 was paid in January 2009 to AO Architecture and Design for technical assistance to the Evaluation and Inspection Team but there was no indication of how the firm had been identified or the fee determined. The Auditor General noted that barely a week after the final payment, a fire at the Embassy on February 13, 2010 badly damaged the accommodation block and ambassador’s residence. The fire destroyed structures valued at Sh42 million and household goods worth Sh9 million. “Specific detail of the structures and goods affected during the incident, including records, were not however made available for audit verification,” the report states.
Gatumbu stated that his office in September 2010 physically checked the damage and found that that the residence could not be occupied. “Indications are that another accommodation may have to be rented for the Ambassador until the building is repaired and restored to its original form,” states the report. He pointed out that fire insurance cover for Sh42 million had been secured with local insurance company Ace Insurance but no compensation had been paid by August 31, 2010.
The Auditor General recommended that disciplinary and administrative action be considered against officers who failed to observe the requirements of the Public Procurement and Disposal Act by single sourcing consultancy services during the acquisition of the embassy. He has recommended that further inquiries be conducted to establish whether or not there are other encumbrances, liabilities or obligations in respect of the property which is now owned by the Kenya government. The Auditor General further recommended investigations be carried out to establish the cause of the fire at the Embassy.