Auditor-General Edward Ouko says the Tourism ministry had no obligation to pay the contractors of Utalii College in Kilifi.
The Ministry of Tourism illegally paid out Sh500 million to contractors building the Ronald Ngala Utalii College in Kilifi County, Auditor-General Edward Ouko has said in a new report.
Mr Ouko said the ministry released the money yet it has no contractual obligation between it and the contractors.
He said the main contract agreement for the construction of the college was signed on May 14, 2013 between the Catering and Tourism Development Levy Trustees (now Tourism Fund) and various contractors when the Tourism Development Levy Trustees were not in office.
“The current payments arrangement poses serious challenges for remedies since there is no legal obligation between the State department of Commerce and Tourism and contractors,” he said in a qualified audit opinion of the ministry’s books of accounts for the year to June 2015.
Mr Ouko said the legal status of the proposed college is not certain as it is yet to obtain corporate status.
During the financial year under review, the ministry made payments in respect of construction of the college totaling Sh500 million. M/s Mulji Devraj and Brothers who are the main contractors received the lion’s share of Sh381.9 million, M/s Armtech Consulting Engineers (Sh29.5 million), M/s Ujenzi Consultants (Sh41.3 million), PKF Consultants (Sh3.9 million), Geomeasures Surveyors (Sh3.8 million) and Baseline Architects Ltd Sh39.3 million.
Mr Ouko said the payments to the consultants were based on the contract sum of Sh8.9 billion whereas the actual works have been scaled down into Phases I with a sum of Sh4.9 billion and Phase II with Sh4 billion of which Phase II is yet to commence.
“Additionally, the project was awarded without the ministry having funds contrary to the Public Procurement and Public Finance Management Act 2012,” he said.
The cabinet had approved the project of Sh1.94 billion which has now escalated to Sh8.9 billion. “Under the circumstances, the propriety and legality of the expenditure of Sh500 million on Ronald Ngala Utalii Academy could not be confirmed as at June 30, 2015,” he said in a report dated June 27 and tabled in Parliament on Thursday evening.
Parliament is investigating how the project was escalated from Sh1.94 billion to Sh8.9 billion and latter scaled down to Sh4.9 billion.
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