Taxpayers may have lost more than Sh300 million that the National Youth Service paid to contractors for projects which have stalled for years.
Some of the works have been declared as shoddy.
A contractor was paid Sh7 million for the construction of housing units at the NYS vocational training institute in Industrial Area but has since vanished.
The contractor abandoned the site after receiving the money, which was the first payment.
Another who was hired later also disappeared after taking Sh23 million.
Auditor General Nancy Gathungu has flagged the irregular expenditures amounting to Sh303 million in a new report covering the period to June 30, 2023.
Gathungu said a physical inspection of the housing project conducted in March revealed that despite Sh30 million going down the drain, the task was incomplete.
In another case, a supplier who was to deliver water tanks, booster pumps and towers for installing the tanks, abandoned the project over non-payment of Sh5.7 million.
The contract of Sh11,715,396 was signed on September 3, 2019, for 16 weeks ending October 31, 2020, but the contractor jumped ship about a week to the end.
A site visit carried out in March revealed that the works had stalled and that no progress had been made to resolve the row.
“In the circumstances, value for money has not been realised on the project,” the auditor general said.
Some Sh81 million paid for constructing a four-storey classroom block and workshops at the NYS Engineering Institute in Ruaraka is also at stake.
The construction stalled in 2017 when the work was 95 per cent done and 92 per cent of the Sh88 million contract paid.
Gathungu said the project was incomplete at the time of the audit review and management did not provide measures being taken to complete the same.
Works such as electrical, plumbing and drainage that were valued at Sh4.8 million were yet to be completed.
“Value for money has not been realised in the 12 years after the construction commenced,” Gathungu said.
Works on a double-span kitchen, dining and barracks at the institute in Ruaraka also flopped, with Sh186 million already paid out.
A site visit in March 2024, revealed that no construction was ongoing and the contractor had abandoned the works.
Further, visible cracks were spotted on the walls and floors, which continue to deteriorate.
“The Management claimed that the delay in completion was mainly due to delayed payments to the main contractor and sub-contractors,” the auditor said.
“In addition, Management has not made any efforts to invoke the relevant clauses of the contract to surcharge the contractor for the delayed completion.”
NYS is also on the spot for paying salaries amounting to Sh99 million outside the government payroll system.
Gathungu has cast doubt on the payments, which NYS management said were made to trainers and lecturers.
The auditor said the youth service did not provide documents to back the hiring.
“The criterion used in hiring the tutors was not provided for verification,” Gathungu said, citing a breach of public service policies.
Also in doubt is Sh740 million outstanding payments which were not supported by a ledger and payment vouchers.
Taxpayers could be at the risk of losing millions of shillings as the services’ revenue is collected manually.
Revenue from farming, security services and hire of machinery which are key income streams, is yet to be digitised.
Gathungu said the “gaps in the manual system may lead to undetected loss of revenue".
“The benefits that would accrue with automation such as invoicing, revenue collections, reconciliations and banking have not been realised,” Gathungu said.
“In the circumstances, the effectiveness of internal controls on revenue collection could not be confirmed.”
During the year under review, NYS failed to meet revenue targets, with details showing that it realised Sh400 million against a target of Sh723 million.
“No explanation was given for under-collection of revenue. Further, the underperformance affected the planned activities and programmes of the service,” the report reads.
The audit has further flagged excess staff in senior management positions of assistant director, senior superintendent and superintendent.
The report reveals that while the service's approved number of assistant directors was 14, an excess of 16 were in post.
At least 52 senior superintendents were found holding office against an authorised establishment of 36.
Auditors also found 62 superintendents holding posts against the approved count of 57, meaning five were in the position irregularly.
“Management did not explain the overstaffing in the senior management positions,” Gathungu said.
NYS assets, it emerges, are also at risk of loss as the service has not maintained a complete and accurate assets register.
The audit established there was no information on the assets such as type, date of acquisition, supplier, cost, current value, remaining useful life and salvage value.
“Further, the assets have not been tagged for tracking and identification,” the auditor said, further citing lands covering 2,247 hectares in various locations.
NYS's pending bills of Sh15 billion were also not disclosed in the financial statements.
The service has also not paid Sh378 million to contractors, including youth who worked in slum clean-ups initiated by then-Devolution CS Anne Waiguru in 2015.
“Management did not provide a satisfactory explanation for the delay in paying the cohorts,” Gathungu said.