The Procurement Trap for County Chiefs in Graft War

By Fredrick Obwanda

In her 24th July 2019 ruling in a case pitting Samburu Governor Moses Lenolkulal and the Director of Public Prosecutions (DPP), Ngugi set a precedent by upholding the trial court’s ruling that barred Governors charged over corruption from accessing their offices. This was a major boost to the prosecuting agency’s efforts against graft in the counties.

So far, in the intensifying war on corruption and abuse of office, six county chiefs have been charged in court. These include Samburu’s Lenolkulal, Okoth Obado (Migori), Muthomi Njuki (Tharaka Nithi), Mike Sonko (Nairobi), Ali Korane (Garissa) and former Kiambu Ferdinand Waititu. Other counties on the spotlight are Kirinyaga, Elgeyo Marakwet, Garissa, Siaya, Turkana, Mombasa, Baringo, Marsabit, Kitui, Murang’a, Homa Bay, Kilifi, Wajir, Nakuru, Machakos, and Nandi.

The procurement process seems to be the genesis and common denominator in all the cases with investigators focusing on glaring blatant violations of the Public Procurement and Asset Disposal Act, 2015 and Public Finance Management Act, 2012. These regulations detail identification requirements, procurement planning, requirements, source determination, vendor selection, award of contracts, implementation or delivery of the goods, and lastly activation of the payment processes.

Could the people of Kenya have intended to then pass legislation that allowed State officers for whom grounds for removal from office are provided in the Constitution, to ride roughshod over the integrity required of leaders, face prosecution in court over their alleged corrupt dealings, and still continue to enjoy the trappings of office as they face corruption charges alleged to have been committed while in office and committed within the said offices?

Posed High Court judge Justice Mumbi Ngugi

Flouting procurement processes

Public procurement is not so much a complex process as some entities would want us to believe. It constitutes of three stages starting from the pre-tendering, the tendering, and lastly the post award phase. In most cases, the first and the second phases are done to book because of the documentation required to meet the threshold of procedures and guidelines. However, it is the post award phase where procurement officers and the suppliers of goods and services collude leading to loss of public funds in all the different types of procurement employed.

A closer look at the mentioned counties especially with a focus on their audited books from 2015 -2018, paints a very sad picture.

For instance, in Tharaka Nithi County, the audit raised queries amounting to Kshs 813 million. The expenditures were done with no proper support documentation. Further scrutiny of the same period showed that county residents did not get services for amounts ranging to Kshs 1.9 billion, which the auditor general termed as “under absorption.”

Kitui County officials are facing numerous allegations of non procedural awards to insurance companies amounting to Kshs 8 million, purchase of pesticides worth Kshs 8.3 million and booklets worth Kshs 37.4 million, in addition to other awards exceeding over 140 million. The county was also unable to account for Kshs 427 million attributed to constant budget relocations without the necessary approvals, over commitment of staff salaries against the regulations, recruitment of excess staff and lack of proper expenditure receipts.

Meanwhile in Kirinyaga, the Governor is under scrutiny for irregular payment of Kshs 23 million on allowances, and breaching procurement rules on the award of the Kshs 77 million Mwea Makima water project tender meant to serve 30, 000 Kirinyaga county residents.

In Marsabit, the Governor, his head of finance and procurement are facing questions relating to the irregular payments for relief food supply. The county is accused of inflating the cost of a 90 kg bag of maize by paying Kshs 7000 and Ksh12, 000 against a market price of Kshs 3,500.

At the coast, Kilifi Governor is under investigation for alleged irregular procurement for the set up and equipping of a 150-bed capacity COVID-19 isolation center. Six of his staff members have also been charged with obstructing justice by denying the EACC all files relating to the case. He is also being questioned for alleged irregular payment of legal fees to two law firms between the 2015-2019 financial years.

Currently in court, Garissa Governor Ali Korane is alleged to have reapportioned development budgets to other non-budgeted expenditures. He is accused of diverting Kshs 233 million World Bank funds earmarked for infrastructure development under the Kenya Urban Support Program (KUSP), for the procurement of borehole equipment for Garissa water and sewerage company (GAWASCO), pharmaceuticals for the health department, and also withdrawing some of the monies in cash.

Former ousted Kiambu Governor Ferdinand Waititu and his wife Susan Wangari Ndung’u, six other county officials were charged in court over alleged embezzlement of Kshs 588 million from Kiambu County, this was in relation to irregular procurement as regards upgrading of several roads in the county.

In Migori, Governor Okoth Obado alongside his four children and county officials and suppliers has been charged with misappropriation of Kshs 73 million of public funds. The kickbacks were allegedly wired to the Governor and his children’s accounts abroad.

Enhancing the procurement system

In 2003, the national treasury introduced Integrated Financial Management Information System (IFMIS) or electronic procurement (e-procurement) throughout the country to serve Kenyans effectively on issues relating to public procurement. “IFMIS as an e-procurement was therefore to ensure that public procurement of goods and services is done fairly, equitably, transparently, competitively and in a cost effective manner by all government procuring entities as per article 227 of the Constitution of Kenya”, said the then Cabinet Secretary for Finance Dr. Henry Rotich.

He added that the National Treasury was and still is mandated by Section 12 (1) (e) of the Public Finance Management Act (2012) to design and prescribe an efficient financial management system for the National and County governments, which will also ensure transparent financial management and standard financial reporting. IFMIS as an e-procurement system is linked to an Item master which has indicative prices for all commonly used items within all government offices, updated annually based on market surveys to ensure that there are no price inflations by procuring entities, thus enhancing value for money.

In addition, e-procurement has inbuilt approvals at all levels of the procurement process to enhance checks, controls and accountability. Apart from the projected increase in efficiency on service delivery due to competition, transparency, and lower transaction costs, the e-procurement system was designed to enable the government increase and monitor government procurement opportunities to the preference groups, including women, youth, and persons with disability.

Open contracting

In order to put a stop to the ongoing pilferage of public funds the government must adopt open contracting principles of disclosure and public participation throughout the procurement cycle especially at the post award stage where Governors are blatantly misreporting, participating in cost and price migrations.

In addition, the government must adopt a complete policy shift and continuously train all those involved in the tendering process, and enhance access to procurement information to avoid backroom deals. Lastly, it ought to strictly enforce a proper traceable records management tools for procuring entities, and as the president said in his recent address on corruption, as a country we must start adopting and taking e-procurement seriously because it is less prone to manipulation, as this is the only way that Kenya will minimize corruption at the counties.

Fredrick Obwanda is Programme Director at UWAZI Consortium

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