The Ministry of Tourism is on the spot over Sh220 million payment to a local law firm in pending bills dating back to 2006.
The payment, from the former Ministry of Trade, is an increase from the initial Sh12 million bill owed to Tele News Africa and Atlantic Region. The bill was in contention as the contract for advertising services by the firm had expired in June in 2004, but the firm nonetheless continued to render the service.
The National Assembly’s Public Accounts Committee (PAC) now wants the Director of Public Prosecutions (DPP) Noordin Haji to prosecute those found culpable of incurring the ‘wasteful’ expenditure.
“Available information indicates that the Attorney-General (AG) in 2006 observed that the ministry was obligated to settle the claim since it agreed to participate in disputed third phase of the programme,” PAC said in a report to Parliament.
In August 2011, the AG advised the Ministry of Trade and Industry to pay the contractual amount but negotiate on the interest payable even though there was no formal contract for phase II. The advice was, however, not adhered to.
The Principal Secretary in the State department of Tourism Joe Okudo told MPs that in a bid to clear the bill, the ministry made a payment of Sh150 million in June, 2017 to curb the accrual of interest, based on advice from the Solicitor-General.
He said the ministry also redirected the matter to State department for Trade.
PAC said the Tourism Ministry paid a further Sh70 million in the year 2017/18 in addition to the Sh150 million bringing the total to Sh220 million.
The firm went to court over non-payment and by judgement dated July 24, 2012, it was awarded Sh110.06 million being the initial Sh12 million plus 26 percent interest since April 2004.
“Part payment of Sh65 million was made in July 2013 as interest continued to accumulate. As at December 2016, the outstanding bill had accumulated to Sh210 million,” the committee said. “Had the professional advice by the AG to pay and negotiate the interest payable advice been followed, this could have saved the government the interest accumulated of Sh198 million.”