Auditor General Nancy Gathungu has put Kenya Power on the spot over the payment of Sh488.7 million to some eight suppliers without proper documentation, stating value for money could not be confirmed.
Ms Gathungu says in the latest audit report that the committee appointed last December to vet a select long-standing debts recommended the payment of the amount and even introduced one more supplier who was not in the initial list of their vetting.
The committee recommended the payment relating to 157 invoices for services provided in 2014 and 2017 by eight suppliers despite their vetting revealing a lack of key documents such as a valid contract, performance bond, local purchase orders, and physical goods received notes as well as inspection and acceptance reports.
“However, the committee recommended payment to the suppliers without the above cited supporting documentation being provided and payment of Sh488.71 million was subsequently made,” says Ms Gathungu in the audit for the year ended June 2023.
The audit report says the committee added one supplier who was not among the seven it was mandated to verify and recommended payment of Sh11.63 million.
According to Ms Gathungu, the inclusion of this additional supplier in the committee report and the subsequent payment was irregular and its validity could not be confirmed.
An invoice of one of the seven suppliers amounting to Sh835,200 was also paid despite not having been validated by the committee, adding to the irregularities at Kenya Power.
The audit further showed that a prior verification of all pending payments done in 2019 and approved by the then managing director on May 3 of the same year included four of the seven suppliers for which outstanding invoices had been settled.
“The earlier report did not indicate any outstanding invoices in respect to these suppliers for the stated period between 2014 and 2018,” says Ms Gathungu in the audit.
“Review of vendor accounts for these suppliers in the accounting system did not have evidence that the invoices were posted prior to settlement in the current financial year, which makes their existence doubtful.”
The payment of the four by Kenya Power in the financial year under review, therefore, points to a potential double payment, in the absence of crucial documents to show the supply of goods in 2014 or 2017.
The Sh488.7 million irregular payments added to the Sh26.82 million that Kenya Power paid to former managing director Bernard Ngugi as a final exit payment compromising full compensation for 15 months that were remaining on his contract.
The loss of office compensation was despite documents presented to the auditor-general showing that Mr Ngugi, through an August 3, 2021 letter, requested to resign and his wish granted eight days later.