The Auditor-General's office now says that it cannot ascertain whether the payment of Sh3.5 billion for police insurance was lawful.
The amount was paid to a private company to provide comprehensive group life insurance cover for police officers under contract NPS/002/2014/2015.
Auditor-General Edward Ouko notes in his report that unsatisfactory matters were reported on the irregular payment of the amount, arising from the unexplained irregular award of the contract.
“In view of the forgoing, I am not able to confirm that the payment was lawful and effective as required by the Constitution.
"The State department of Interior did not avail payment voucher no. 391 for Sh147.2 million together with assessment report on the performance of the insurance,” Mr Ouko said.
The Interior ministry is on the spot, with Mr Ouko also noting irregular procurement of air tickets, irregular procurement of goods, fictitious entry in store records, irregular procurement of motorcycles, unlawful cash withdrawals, unaccounted cash transfers and falsification of records.
The report tabled in the National Assembly by Leader of Majority Aden Duale shows that Sh12.7 billion in cash transfers cannot be explained.
Sh8.7 billion in irregular use of 42 letters of credit by the ministry was also noted and incomplete bank statements worth Sh340 million.
The Sh12.7 billion was a call deposits at INSTB, fixed deposit at INSTB, Euro call deposit and USD call deposit accounts, which is contrary to the Public Finance Management Act.
The law requires prior approval by the Cabinet based on the recommendations from the National Treasury but this was not done.
Fictitious, unlawful entries
The auditor also noted that interests and proceeds received back into the account is Sh4.2 billion, leaving unaccounted balance of Sh8.5 billion.
The report noted fictitious entry in stores records and Sh4.5 million in unlawful cash withdrawals, which is being handled by the Directorate of Criminal Investigations.
The auditor noted that blank passports valued at Sh133 million were issued by Immigration department to Kenya missions in Washington DC, London, Berlin and Pretoria but they were not recorded in counter receipt book registers as required by public finance law.
“The audit has established that information disclosed on stores ledger and stock control for shoes (S3 card) A241223 has been fraudulently falsified as the same card number discloses different information on April 19, 2016 and May 31, 2017,” the report said.
“Examination of stores card numbers A241057 and A268592 reflects unexplained increase of 5000 and 2000 pairs of footwear respectively. The source of these receipts have not been indicated or explained.”
The audit further notes that a reconciliation undertaken on sample basis for 12 police divisions across the county show that 454 pairs of footwear were ordered and 63 pairs were issued.
But records at Police Quarter Master in Nairobi are falsified to indicate that 392 pairs of footwear were issued.
It also noted that 57 police field units had requested for 12,852 pairs of foot wears but 3,763 pairs were issued resulting in a shortfall of 9,089 that were not available in the store.
“A physical check of the condition of shoes being used by the police across the country revealed a pathetic and unpleasant situation as some officers use worn out shoes while others have opted to buy shoes from various vendors,” the report said.
“This contravenes the dress regulations for the police officers under the standing orders which require all police officers to be in uniform.”
The procurement of Sh2.3 billion twin turbine engine VIP carrier helicopter has also been questioned.
The report indicates that the ministry said the purchase of the helicopter is classified but did not provide tendering and contract documents.
Payment records show that the amount has already been paid through letter of credit but the ministry has only provided payment voucher 328 of June 30, 2016 for Sh683 million, which is 30 per cent of the contract sum and voucher 366 of August 25, 2015 for Sh38.8 million being shortfall in exchange rate difference.
The report also noted irregular procurement of motorcycles and loss of Sh174.8 million.
Mr Ouko said that the procurement of motorcycles at Sh866.2 million shows that the purchase was not included in the approved procurement plan for 2015/16, which is against the public finance regulations.
The report notes that the motorcycles were overpriced and that although the supplier was paid Sh866.2 million for delivery of 4420 motorcycles, the procurement was based on expired supplies branch tender SB/18/2013/2014.
There is also Sh150 million in unaccounted authority to incur expenditure.
“The ministry has not explained reasons for failure to issue the AIE to National Police Service defined as a national security organ in the constitution. No expenditure returns have been provided in support of the amount.”