Companies

Telecoms regulator on the spot over hefty allowances

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The Communications Authority of Kenya offices in Nairobi. PHOTO | FILE

The Inspector-General of State Corporations has opened investigations into hefty payments of imprests and allowances amounting to millions of shillings made to the Communications Authority of Kenya (CA) board members without supporting documentation.

An internal CA report shows that board members have not paid back imprests amounting to Sh8.2 million that were spent without any supporting documents.

Yet another report shows that the regulatory agency’s directors pocketed Sh11.9 million in sitting allowances in only five months to November. This attracted the attention of the State Corporations Inspectorate Unit, which on January 14 moved in to conduct a management audit on the agency.

A breakdown of the allowances figures shows some CA board members pocketed up to Sh1.4 million in allowances within the five months, with some getting up to Sh240,000 for attending a single overseas trip. 

Board members are also paid a minimum of Sh20,000 for attending Press briefings, retreats and team building.

CA director-general Francis Wangusi confirmed the ongoing audit, which he said could take more than a month to conclude.

“If there are any anomalies they will point them out,” said Mr Wangusi. “They’re meeting with the board and staff.”

The State Corporations Advisory Committee (SCAC) told the Business Daily that it had ordered investigations into the CA’s books, including board expenses, unpaid imprests and a schedule of all meetings held by directors.

The Inspector-General has powers to surcharge amounts embezzled by individual directors of State-owned entities.

“The Inspector-General (Corporations) shall have power to surcharge the amount of any expenditure so disallowed upon the person responsible for incurring or authorising the expenditure,” reads section 19(1b) of the State Corporations Act.

The audit at the communications regulator follows complaints over use of taxpayer money to fund a lavish lifestyle for the CA’s 13-member board of directors.

“The board is having so many meetings so that they earn allowances. They sometimes meet to do routine work that should be done by management,” said a source at the CA who requested anonymity.

Directors at the CA earn a sitting allowance of Sh20,000 for every meeting or official function attended and a per diem allowance of Sh13,000 per day for local travel outside Nairobi and $400 per day for foreign travels.

The directors are further entitled to lunch allowance of Sh2,000 per sitting.

The CA is one of Kenya’s most cash-rich State agencies, collecting billions of shillings in licence fees from telecommunication firms. 

The communications regulator earned Sh8.7 billion in income as at June 2012 from frequency management fees, annual operating licence fees, interest income, type approval fees and other levies.

It paid the Treasury Sh4 billion in dividends in the period to June 2013 and had remitted Sh6.29 billion a year earlier.

Total operating expenditure over the period was Sh1.7 billion, spent on salaries and allowances, training, travelling, professional fees, printing and stationery, medical expenses, postage and telephone expenses.

The CA’s annual accounts for the financial year to June 2013 and June 2014 are yet to be audited and made public.

CA chairman Bedan Gituku earned a total of Sh1.1 million in sitting allowances over the five-month period under review, translating to an average of Sh229,600 per month.

Mr Gituku is paid a monthly honorarium of Sh80,000 in his capacity as chairman.

The internal documents seen by Business Daily show that Mr Gituku earned Sh160,000 in sitting allowances to attend a training session in London held in October last year.

Mr Wangusi, who also sits on the board, is not entitled to a sitting allowance because he earns a salary.

Grace Mwendwa Munjuri, a corporate communications specialist, tops the list of CA directors who make a killing out of sitting allowances, earning a total of Sh1.4 million between July and November.

Wilbert Kipsang Choge raked in Sh1.23 million in sitting allowances over the period followed by Beatrice Opee (Sh1.21 million), Hellen Kinoti (Sh1.2 million) and former Kenya Film Commission boss Peter Mutie Sh1.05 million.

Lawyer Kennedy Nyaundi, who previously served as a commissioner at the defunct Interim Independent Electoral Commission (IIEC) and is now a director at the CA, made Sh1.01 million in sitting allowances.

Mr Nyaundi was last year named in the ‘chicken’ scandal by a London court, which convicted two British executives of paying millions of shillings in bribes to Kenyan electoral and exam officials to win printing tenders.

Beatrice Gathirwa, an alternate director to PS National Treasury Kamau Thugge, is shown to have earned Sh1.06 million in sitting allowances.

Former chair of the Media Council of Kenya Levi Obonyo earned Sh912,000 in sitting allowances over the five-month period while John Njoroge made Sh900,000 and Brown Otuya of the ICT ministry received Sh552,000.

ICT PS Joseph Tiampati ole Musuni received Sh226,000 in sitting allowances in the July to November period.

Henry Mungasia, a director at the ICT ministry, earned Sh22,000 to cover sitting allowances and lunch, for attending a meeting on August 18, 2014.

CA directors on official trips and duties are allowed to request for imprest and are required to repay and account for it within 48 hours after the mission.

Mr Gituku, the chairman, is yet to account for Sh405,934.55 advanced to him to attend an International Telecommunication Union (ITU) council meeting held in Qatar in December last year as well as local travels.

Ms Kinoti, an ICT consultant, tops the list of CA directors with questionable imprest totalling Sh913,722 followed by Mr Choge (Sh635,968), Ms Gathirwa (Sh579,753) and Mr Nyaundi (Sh455,083).

Other CA directors with questionable imprest are Ms Opee (Sh385,739), Mr Mutie (Sh310,968), Ms Munjuri (Sh297,968), Mr Njoroge (Sh201,434) and Prof Obonyo Sh39,000.

Most of the outstanding imprests relate to foreign travels to attend meeting convened by the ITU and Universal Postal Union (UPU), trainings in the United Kingdom and local travels for meetings, trainings and trade fairs.