Ouko queries purchase of condemned embassy houses in South Africa

The Auditor-General and the Ministry of Foreign Affairs have differed over the spending of millions of shillings to buy properties in South Africa, which were condemned for demolition after purchase.

Auditor-General Edward Ouko in his report for financial year 2013/14 questioned the purchase of condemned residential houses in Pretoria.

“The ministry purchased eight residential houses in Pretoria. Out of the eight residential houses, two houses were condemned immediately after they were purchased while the remaining six houses are in deplorable conditions,” said Mr Ouko.

But the Foreign Affairs ministry argues that the two properties were condemned after being occupied for 16 years.

“That the seven properties were purchased in 1994 and occupied by the High Commissioner, deputy High Commissioners and staff means they were habitable,” Foreign PS Monica Juma told the Public Accounts Committee (PAC).

“It should be noted that condemnation of the two properties at 281 Crown Street Polaris and 318 Polaris took place in 2010, almost 16 years after they were purchased.”

The ministry said the property at 281 Crown Street was bought at 1.1 million rand (then Sh11 million) and 318 Polaris cost rand 495,000 (then Sh4.9 million).

MPs will travel to South Africa to ascertain the true state of the properties.

“Further, out of the eight houses, seven of the houses were purchased at a cost Sh95 million while the value and the date of purchase of house No. 281 located at Waterloof/Crown Street was not availed,” Mr Ouko said.

He said the ministry has approved the demolition of the two condemned houses. “No explanation has been provided for purchasing condemned houses and then almost immediately approving their demolition,” he said.

The PAC said there was serious variance in Auditor General’s report and the PS’s response.

“The committee resolved to undertake a fact finding visit to Japan and South Africa to ascertain the status and provide an up to date report which will inform the way forward in the 2014/15 financial year report,” the MPs said in a report on the Auditor General audit of the 2013/14 government accounts.

The MPs will visit Japan after the PS failed to explain the difference in valuation and purchase price of the Tokyo Embassy chancery and ambassador’s residence in 2009/2010 at the cost of Sh1.4 billion.

The Commissioner of Land valued the property at Sh1.24 billion, leading to unexplained variance of Sh185,502,890.

The committee heard that the embassy contracted an independent valuer who valued the property Sh1.19 billion against the purchase price of Sh1,430,733,890 leading to unexplained variance of Sh233,850,041.

“In addition, out of Sh1,430,733,890, the embassy withdrew... Sh1,342,018,446 from the bank to pay for the property. However, the supporting payment voucher, cheque counter foils, electronic fund transfer details and bank statement of Sh1,430,733,890 paid for chancery and ambassador’s residence were not availed for audit verification,” said Mr Ouko.