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Citizen Weekly

Sunday 31 August 2014


Panic has gripped school principals across the country after the auditor general implicated 10 national schools for misappropriation of money allocated by the national treasury and are now set to appear before the Public Accounts Committee for grilling.

The committee’s chairman Budalangi MP Ababu Namwamba, has summoned the principals to account for the funds allocated to their institutions when they were elevated to national schools. Already, 10 principals have received summons to appear before PAC.

The Auditor General in his report for the year 2011-2012, unearthed gross mismanagement and looting of the said funds. The allocation saw each school get more than Sh25 million. The principals to be grilled include Friends School Kamusinga in Western, Nakuru Girls, Limuru Girls, Muthale School in Kitui, Nairobi School and Kenyatta High in Mwatate.

Others are Malindi Boys, Masaba High in Trans Nzoia, Kenya High, and Mary Hills School in Thika, Lenana High and Chepsaita School in Uasin Gishu.

According to the report, the expenditure relates to disbursements made to newly established and existing national schools for rehabilitation of buildings and facilities at the schools. The audit carried out revealed that an amount of Sh112,687,763.95 was misappropriated in various ways as detailed below:-

At Friends School Kamusinga, the Auditor General revealed that the school received a total of Sh25 million in two tranches of Sh12.5m each during 2010/2011 for rehabilitation works at the school. As at the time of the audit, available records, namely bank statements and expenditure summaries indicated that the institution had spent Sh14,224,450 for renovation and rehabilitation works.

However, no documentary evidence such as payment vouchers, works certificates, and invoices were made available for audit confirmation. The school’s management however, explained that the documents were destroyed by fire at the Bungoma district schools audit office. There was however, no evidence to support the fire incident and as a result, propriety of the expenditure of Sh14, 224,450 could not be confirmed.

The school principal Edwin Namachanja has been under pressure from two Bungoma civil rights groups, People Against Corruption and Caucus for a Better Bungoma, who have demanded for his immediate transfer following the report released in October last year by the Auditor General Edward Ouko that revealed massive graft at the institution.

At Nakuru Girls High School, it was allocated Sh25 million for rehabilitation works and the same was utilised for construction of a classroom block and a dormitory. The contract for the construction of classrooms was awarded to a construction company at a contract price of Sh11,381,108 on June 14 2011.

However, the contract was later varied by Sh3,522,890 or about 31pc to Sh14,903,999 contrary to Section 31(c) of the Public Procurement and Disposal Regulations, 2006. As at the time of the audit, the contractor had been paid the total contract sum of Sh14,903,999, less 10pc retention fee.

However, physical verification carried out revealed that floor furnishing, verandah and finishing works for the ramp had not been completed. No explanation was given for payment of incomplete works.

Muthale Girls School was allocated Sh25,000,000 during 2010/2011 for upgrading of learning facilities. Part of the contract was for construction of a three storey hostel. The labour contract was awarded for an amount of Sh2,872,005. The works were due for completion by February 1 2012. Although the school had paid a total of Sh2,449,896, as at the time of audit, 2012, the works were still incomplete. No explanation has been given for the delay in completion of the works, seven months after the deadline.

Kenyatta High School, Mwatate was also allocated Sh25 million during 2010/2011 being grants for infrastructure improvement. The school management used the funds during the year for rehabilitation of 16 classrooms, four laboratories, one administration block, seven dormitories and one dining hall kitchen complex at a contract sum of Sh11,849,600.

Records maintained at the school revealed that the contract price was inflated by Sh602,039 to Sh12,451,639, to include additional invoices for painting of four laboratories. The additional cost of Sh602,039 was, however, not justified and was therefore not a proper charge on public funds.

The school management also procured 100 desks from Kitiwo Enterprises at Sh387,000 and charged the expenditure to the infrastructure grant. The management however did not avail documents to support the procurement of the desks. Propriety of the expenditure of Sh387,000 could therefore not be confirmed.

Malindi Boys High School also received Sh25million during 2010/2011 for the rehabilitation of various infrastructures in the school. The school management identified ten projects estimated to cost Sh27,883,596. The school awarded labour contracts for builders’ work to two contractors and supply of materials to four suppliers.

As at June 30 2012, the school had paid a total of Sh25,876,035 to the labour contractors and suppliers of materials and equipment. Physical verification at the school in September, 2012 however, revealed that the projects were between zero pc to 50pc levels of completion while 93pc of the estimated cost has been paid. No explanation was provided for the low levels of completion of the projects in comparison with the expenditure incurred.

Kenya High School received Sh48 million under the Economic Stimulus Programme for the construction of three classrooms, expansion of dormitory, renovation of kitchen and infrastructure improvement of the dining hall.

However, audit of expenditure documents and physical verification carried out revealed that the school utilised the whole amount on construction of staff living quarters (houses), contrary to the ministry’s approved projects. The school management has not explained the reasons for diversion of project funds from the original purpose.

Mary Hill Girls High School management tendered for construction of the proposed laboratory block in April 2011 and awarded the work to Igegania Builders at a cost of Sh14,979,002. Although the contract documents indicate that the project was to be completed in January 2012, as at February 2012, the project had not been completed and the contractor’s performance bond of Sh14,979,002 had expired on December 19 2011. By this time, the institution had paid Sh7,417,901 against works done only up to first floor. No explanations were given for the delayed completion of works at the school.

The school management further awarded a contract for electrical installation works at a contract price of Sh2,904,292 which was more by Sh334,810 compared to the lowest evaluated bidder’s price of Sh2,569,481. No justification was given for the action which resulted to a loss of Sh334,810 by the school.

Limuru Girls School received Sh25 million for upgrading and rehabilitation of facilities. The school management tendered for construction of a dormitory block and awarded a contract at a cost of Sh23,409,041 which differed with the price of Sh23,020,812 quoted by the contractor. The difference of Sh388,228 was occasioned by correction of errors during technical evaluation stage. The variation of contract price was, however, done without following the requirements of Section 63 of the Public Procurement and Disposal Regulations 2006.

Further, due to additional works, the contract was later varied from Sh23,409,041 to Sh26,700,812. However, the school paid Sh29,200,812 to the contractor, resulting in an overpayment of Sh2,500,000 above the revised contract sum.

Physical verification and discussions held with the project management team revealed that the works were incomplete at approximately 70pc level of completion. The basis of the additional payment of Sh2,500,000 has not been explained.
Further, the additional works were later stopped due to termination of the contract by the school management. The management then advertised for a contract for completion of Phase 1 of the upper block and ground floor. The contract was awarded at a cost of Sh3,531,324, an amount which was not in the original project cost. Under the circumstances, the school’s expansion programme may not be realized as intended.

Nairobi school during 2010/2011 financial year, received Sh25million for rehabilitation of school facilities. To facilitate the project, the school management tendered for construction of a toilet block and associated electrical and civil works, and awarded the contract to the fourth lowest bidder at a cost of Sh531,190, instead of the lowest bidder who had quoted Sh359,773. No explanation was given why the contract was not awarded to the lowest evaluated bidder which would have resulted to a saving of Sh171,417.

Lenana High School received Sh48 million during 2010/2011 and had not been utilised for the intended purposes by the time of the audit inspection in September, 2012; 16 months after the funds had been received.

The school had received the funds based on development plan it had submitted to the ministry and which was approved. The plan included construction of classrooms, laboratories and a dormitory. The school management did not explain the reasons for not utilising the funds for the intended purposes, and therefore denying the students opportunity to benefit from the facilities.
Chepsaita Secondary School in Uasin Gishu received Sh1,053,066 as capital grant. The amount was used to fund construction of one laboratory, one classroom and one pit latrine block at the school in May 2012.

The ministry of Public Works gave cost estimates of Sh870,000 for the classroom. The tender was however, awarded to a contractor who quoted a cost of Sh2,048,990 which exceeded Public Works estimates by Sh1,178,990 or about 136pc. No explanation was provided for the irregular award.

Friends School Masaba in Trans-Nzoia through the school management instructed a contractor to commence works for construction of one laboratory block at a contract price of Sh3,187,150 during the year but without a budgetary provision for the works.

As at June 30 2012, the contractor had completed the certified works valued at Sh1,823,270 and invoiced the school for the works. However, due to lack of funds, the school has been unable to pay the contractor for works done.

The awarding of the contract was contrary to Section 26(6) of the Public Procurement and Disposal Act, 2005, which states that a procuring entity shall not commence procurement procedures until it is satisfied that sufficient funds have been set aside in its budget to meet obligations of the resulting contracts. No explanation has been provided for the unsatisfactory state of affairs.

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