Nairobi-Thika highway: Auditor-General Edward Ouko has questioned whereabouts of billions of shillings in roads levy fund. PHOTO | FILE
What you need to know:
The Ministry of Transport and Infrastructure failed to explain the whereabouts of Sh2.6 billion meant for the construction of roads in the year to June 2015.
Auditor-General Edward Ouko said that although the department received Sh25 billion from the Kenya Roads Board (KRB) for onward disbursement, available documentation only supported the transfer of Sh22.4 billion to the various roads authorities, leaving Sh2,589,824,498 unaccounted for.
The report comes one month after the Treasury increased by Sh6 to Sh18 per litre the roads maintenance levy, which took effect last Friday.
Nearly Sh3 billion meant for the construction of roads in the financial year ended June 2015 has gone missing, turning the spotlight on spending in the Ministry of Transport and Infrastructure that receives the largest allocation of public funds every year.
Auditor-General Edward Ouko says the department failed to explain the whereabouts of Sh2.6 billion meant for the construction of roads in the year to June 2015 – a finding which questions spending in the ministry.
Mr Ouko says in an audit report submitted to Parliament that although the department received Sh25 billion from the Kenya Roads Board (KRB) for onward disbursement, available documentation only supported the transfer of Sh22.4 billion to the various roads authorities, leaving Sh2,589,824,498 unaccounted for.
“The statement of receipts and payments disclose an amount of Sh22,446,501,146 as having been received from the Kenya Roads Board.
However, a review of the records at the Kenya Roads Board indicated that an amount of Sh25,036,325,644 was remitted to the ministry for onward disbursement to roads authorities, resulting in unaccounted for transfers of Sh2,589,824,498,” Mr Ouko says in an adverse audit opinion on the Ministry of Transport and Infrastructure for the year ended June 30, 2015.
The KRB is the agency charged with co-ordinating the development, rehabilitation and maintenance of the country’s roads network.
The board, established under the Kenya Roads Act, 2007, receives and disburses funds comprising of road maintenance levy and transit tolls.
The board released the funds to the Kenya Rural Roads Authority (KeRRa), the Kenya National Highways Authority (KeNHA) and the Kenya Urban Roads Authority (Kura) for the building and maintenance of various roads.
The audit report comes one month after the Treasury increased by Sh6 to Sh18 per litre the roads maintenance levy, which took effect last Friday.
The Treasury imposed the new levy through the Road Maintenance Levy Fund (Amendment) Order 2016, a move that is expected to put billions of shillings more in the hands of the board.
The new tax measure that the Treasury secretary, Henry Rotich, introduced in his Budget Statement this year, saw the cost of diesel rise by Sh9.53 last Friday.
Diesel, which is mostly consumed by industrial machinery, trucks, tractors and buses, is now retailing at Sh83.24 a litre in Nairobi.
The price of petrol went up by Sh6 to Sh92.93 per litre – the highest level since November – forcing personal car users to dig deeper into their pockets.
The Auditor-General’s report on the missing Sh2.6 billion road maintenance levy cash casts the spotlight on the ministry’s use of taxes collected from motorists.
Mr Ouko has also questioned the whereabouts of Sh14.7 million that the department of infrastructure collected in appropriations in aid (AIA) from its regional offices.
The report says the regional offices’ materials department collected Sh14,568,050 in AIA, which was not disclosed in the statement of receipts and payments for the year.
“The whereabouts of this money is not known,” Mr Ouko says. And in a finding that is likely to revive public debate on the government’s spending of the proceeds of the Sh250 billion Eurobond funds.
Mr Ouko says he could not ascertain the correctness and accuracy of receipts and payments of the proceeds of foreign borrowing.
The finding is linked to what the audit report calls a Sh2.8 billion understatement.
Mr Ouko says the ministry’s statement of receipts and payments shows that it received Sh24.7 billion proceeds of foreign borrowing, an account that differs from the total journal entries of Sh27.5 billion, resulting in an understatement of Sh2.79 billion.
The report also casts doubt on the accuracy of the ministry’s records on proceeds from foreign grants amounting to Sh5,030,114,823 during the year under review.
It says the supporting schedule and the ledger indicate an amount of Sh3,861,475,171, resulting in unexplained difference of Sh1,168,639,652.
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