Former Film Classification Board CEO Ezekiel Mutua may be forced to refund Sh3.1 million in excess salary he was paid on the financial year ending June 2020.
As of June 30, 2020, KFCB cumulatively paid Sh15.3 million, comprising Sh9.2 million and Sh6.1 million in the financial years 2019-20 and 2018-19, respectively.
Auditor General Nancy Gathungu has flagged the excess payment as irregular, citing lack of approval by the Salaries and Remuneration Commission.
The KFCB board at a meeting on January 31, 2019, resolved to review the CEO's salary from Sh348,840 to Sh1,115,850 per month. The board backdated the new rate to November 2018.
“The payment was made without the approval and advisory of the Salaries and Remuneration Commission,” Gathungu said.
In the period under review, KFCB employee costs rose from Sh148 million to Sh208 million.
“Consequently, the validity of the expenditure of Sh9,204,120 included in the employee costs for the year could not be confirmed,” the auditor added.
The audit further revealed that the board procured six million film classification stickers between November 3 and January 2012 for Sh47.5 million.
Gathungu warned that taxpayers could lose as much as Sh26 million on some stickers yet to be dispatched to regional offices.
“Examination of stores records maintained by the board revealed that 2,784,789 stickers valued at Sh26 million had not been used or issued to the regional offices across the country," the audit report said.
The auditor added, “The management acknowledges that the inventory is slow moving and may have become obsolete due to changes in technology.”
She questioned why the board has not provided in its books of accounts, allocations for impairment loss from the delayed dispatches.
“Consequently, the accuracy and fair statement of inventory as at June 30, 2020, could not be confirmed,” Gathungu said.
The Film Board is also on the spot for irregular procurement of ICT equipment and services during the period under review.
KFCB procured computer accessories and data processing equipment for Sh4.4 million but the auditor says procedure was not followed in the purchases.
Gathungu said the procurement was done without using framework contracts maintained by the Ministry for Information Communications and Technology.
A circular of March 2018 provided that all ICT equipment and services be sourced centrally by the Joe Mucheru-led ICT ministry.
“Further, management did not provide for audit review approval by the ICT ministry to procure outside the framework contracts as required by circular of March 1, 2018,” Gathungu said.
The board was in breach of the law to that extent, she said.
Also queried was an over expenditure of Sh63 million on general expenses, which management attributed to the increased number of public awareness and campaigns to sensitise the public on the mandate of the board.
The expenses, Gathungu said, have created pending bills that ate into the board’s allocations for FY 2019-20.
“The expenditure was not supported by approved work plans and approved budget allocation in line with Section 43(2) of the Public Finance Management Act, 2012,” the audit report reads.
“Under the circumstances, the board is in breach of the law,” Gathungu said in the report tabled in Parliament on December 2.
(Edited by V. Graham)