Integrity vetting targets weeding out rogue employees and contractors involved in financial impropriety.
The Ethics and Anti-Corruption Commission(EACC) is expected to assist with verifying the wealth held by each of the employees.
The Kenya Electrical Trades and Allied Workers Union (Ketawu), which represents Kenya Power workers, confirmed the commencement of the lifestyle audit and urged for impartiality.
Kenya Power has begun a lifestyle audit of its staff as it moves to crack down on fraud linked to some rogue employees.
Sources told the Business Daily that the first phase of the exercise will cover the executive team at Kenya Power and later extend to the rest of the firm’s more than 10,000 workers.
The Ethics and Anti-Corruption Commission(EACC) is expected to assist with verifying the wealth held by each of the employees, with the audits set to include the main contractors doing business with the power utility.
On Tuesday, Kenya Power Acting Managing Director Rosemary Oduor held an online meeting with staff and assured them of fairness in the process that targets weeding out rogue employees involved in financial impropriety.
The Kenya Electrical Trades and Allied Workers Union (Ketawu), which represents Kenya Power workers, confirmed the commencement of the lifestyle audit and urged for impartiality.
“We fully support the lifestyle audit and urge management to remain fair as it promised. Everyone should be open to scrutiny,” Ernest Nadome, Ketawu secretary-general, told the Business Daily.
The ongoing audit is part of the recommendations of a task force appointed by President Uhuru Kenyatta to look into the woes that saw the utility firm post a net loss of Sh2.98 billion in the financial year ended June 2020 — it’s first in 17 years — despite the huge potential for profitability.
The task force recommended that all Kenya Power employees be vetted afresh for integrity, suitability, and qualification for the jobs they hold.
“Use wealth declarations to verify unexplained wealth and this should be initiated through the Ethics and Anti-Corruption Commission to secure assurance of this value ideal,” the task force said, adding that the firm should introduce a shift system to rationalise its staff numbers.
The task force, which was chaired by Industrial and Commercial Development Corporation (ICDC) boss John Ngumi, has also recommended an overhaul of the procurement department.
Financial haemorrhage
“KPLC board replace (redeploy, redesignate, redundancy) all the staff in the entire procurement department and recruit new staff. In the interim, KPLC to outsource procurement to other government agencies with demonstrated experience in procurement of certain high-quality engineering equipment and machinery,” said the task force.
The State-backed utility firm has been in the spotlight amid financial haemorrhage largely linked to procurement scandals.
For example, a preliminary audit report shows that Kenya Power held about Sh9.8 billion in deadstock — pointing to the electricity supplier’s messy procurement programmes.
Energy Principal Secretary Gordon Kihalangwa on Monday said an inventory revealed piles of idle stocks at the utility firm, including power transformers.
“We have realised that Kenya Power has a dead stock of Sh9.8 billion currently,” he told the National Assembly’s Public Accounts Committee (PAC).
The dead stock includes items such as cables, meters, and transformers that have been sitting in the warehouses for more than five years.
The Ngumi-headed task force recommended a forensic audit of the power firm’s current procurement systems and stocks to help deal with cartels that have over the years profiteered through fraudulent dealings with rogue employees.
Kenya Power is also on the spot over suspect power purchase deals with independent producers that have exposed the company to paying capacity charges even when their plants are idle.
An inter-ministerial committee is currently conducting a fresh audit of Kenya Power’s supply and demand needs, and pricing policies. Its membership draws from, among others, the Directorate of Criminal Investigations, the Central Bank of Kenya’s Financial Reporting Centre, and the Assets Recovery Agency.
Interior Cabinet Secretary Fred Matiang’i earlier this month said the electricity supplier had been declared a ‘Special Project’ and that the team would also oversee reforms at the utility firm.
System losses
“We are going to do a forensic audit of some of our systems and procedures at Kenya Power. We are working jointly at an inter-ministerial level to reduce the system losses, including the theft of power. We will address all challenges that result in passing unnecessary costs to the consumers,” Dr Matiang’i said.
The task force was appointed in March to look into power purchase agreements (PPAs) – contracts that Kenya Power has signed with electricity producers that also dictate modes of engagement, including payment.
It was tasked to recommend areas that can be reviewed with the ultimate goal of bringing down the cost of power.
The task force, which presented the report to the President in late September, made a raft of proposals that are expected to reduce the cost of power by 33 percent – from Sh24 per unit of electricity to Sh16 per unit by December this year.
