•A service provider issued an invoice for hiring a conference facility a year before the event took place.
•Fuel expenses of Sh1.6 million are also in doubt.
Image: ENOS TECHE
Kenya Ports Authority managers are on the spot over irregularities and financial mess at the entity.
Auditor General Nancy Gathungu has flagged among others irregular payments of overtime, subsistence and consultancy fees.
KPA has also been called out over skewed hiring — a perennial concern— amid observations that 2,236 staff out of 6,480 were from one ethnic group.
This is besides procurement flaws which have exposed taxpayers to possible losses of millions of shillings in delayed supplies and services.
Gathungu has in the new report flagged among others a payment of Sh49 million in respect of overtime allowance to employees on training grades.
Ironically, Kenya Ports Authority Human Resource Manual, 2017, provides that employees on training grades are not eligible for overtime payment.
“In the circumstances, management was in breach of the authority's policies,” the auditor general said.
Gathungu has further cast doubt on the regularity of benefits amounting to Sh9 million that was paid to former managing director John Mwangemi.
The managing director had been in an acting capacity from July 1, 2021, and received acting allowances for 20 months totalling Sh17,220,000 as of March 31, 2023.
The auditor general said it was not possible to established if the officer had the necessary qualifications to act as managing director.
Supporting documents and signed contract agreements with the authority were not provided for audit verification, she said.
“No explanation was provided why the officer, appointed in acting capacity, was eligible for gratuity amounting to Sh5.3 million,” the auditor said.
She further flagged the basic salary of Sh820,000 paid to the officer saying it was above the KPA scale. The MD is of grade HE1 which is paid between Sh306,280 and Sh445,840.
Gathungu says the content of the MD’s pay was not shared with the authority's board and that the job was not advertised.
“In the circumstances, the regularity of the amount of Sh9 million paid on remuneration benefits to the former acting managing director could not be confirmed.”
The review has further cited a doubtable expenditure of Sh12.9 million incurred on subsistence expenses.
“There was no supporting documentation indicating details such as who was issued with the allowance, purpose, period and results of the exercise,” Gathungu said.
The auditor has also invalidated Sh25 million which was paid as a retainer for two service providers who were offering advertising consultancy services.
Gathungu said the payment was not justified by management hence the regularity of the same could not be justified.
Another Sh11 million which was purportedly incurred on trips to various destinations for CSR work was also not backed up by proof of activities.
“There was no evidence that the trips were budgeted for and approved and were for the continuous monitoring and evaluation of projects since there were no CSR work programmes and monitoring and evaluation reports.”
The propriety of some Sh26 million consultancy expenditures has also been queried after it emerged that the contract was awarded to a firm which lacked capacity.
The international consultant was hired to carry out the forensic audit of the authority's land and properties. The contract was signed in 2016.
“It has not been explained why the consultant was awarded the contract if they did not have capacity to execute it,” Gathungu said.
She revealed that as at the time of the audit in April 2024, there was no confirmation that the contract was still valid, and whether it achieved the anticipated objectives.
Fuel expenses of Sh1.6 million are also in doubt. Part of it was Sh1.5 million spent on fuelling vehicles that were not in the authority's asset register.
Some vehicles were fuelled more than once on particular dates without matching justifications of journeys made, leading to irregular usage of 13,568 litres.
KPA did not provide the work tickets to confirm the consumption and gave no explanation on how the vehicles were fuelled outside the control system.
The fuelling management system at ICD Nairobi was also flagged as receipts did not automatically capture the machinery and car registration numbers.
The supplier used a tagging system where unique identification tags were assigned to various vehicles and machinery.
However, there was a particular set of KPA assets that lacked tags and were assigned a universal tag (0297).
The universal tag was not attached to any particular asset and could easily scan and allow access to fuelling without any specific verification or restrictions.
“The authority also did not provide a list of the vehicles and machinery assigned the universal tag and this may create a loophole for system misuse,” Gathungu said.
Some Sh2 million spent on conference facility hiring has also been flagged after it emerged that the service provider issued the invoice a year before the event took place.
“No satisfactory explanation was provided for this anomaly. The procurement process on how the service provider was identified and awarded the contract was not disclosed.”
The reported sale of port passes to the tune of Sh111 million is in doubt after part of the system was disabled.
Gathungu said the disabled parts brought about a missing control and break in integration of the crucial part of the port pass payment validation and printing stages.
This is said to have created a loophole for printing of unpaid or unapproved port passes, undermining the quality assurance and traceability features of port pass system.
KPA has also been fingered for failing to collect Sh8 million in fees for the 84 jetties distributed along the coastline.