The National Assembly’s Public Accounts Committee has been told that the Ministry of Defense signed contracts for amounts above the actual funds received for various projects, resulting in an unbudgeted expenditure of Sh1.4 billion.
This is according to a report by the office of the Auditor-General which flagged the expenditure by the Ministry of Defence as unlawful, resulting in a possible loss of public funds.
The auditor’s reports tabled before the committee chaired by nominated MP John Mbadi, indicated that the ministry incurred unbudgeted costs of over Sh424 million on construction of Level Five hospital for the State Department for correctional Services.
“The contract cost of the project was Sh824 million but they received only Sh400 million,” the report reads in part.
The report further added that the ministry incurred Sh599 million on setting up another Level Five hospital for National Police Service.
The committee was informed that the ministry also incurred a total of Sh405 million for rehabilitating Uhuru and Central Park projects on behalf of the defunct Nairobi Metropolitan.
The committee had as a result of the findings of the report, summoned the Principal Secretary for Defense Patrick Mariru who appeared before the team to explain why the ministry engaged in implementation of costly projects that had not been budgeted for.
“You are aware that it is illegal to engage in any project or development deals without a budget. Why did the ministry violate such simple financial regulation,” asked Mbadi.
In his response the PS told the Committee that the ministries that did the work failed to remit the contractual amount in full, leading to overstretching the budget.
“The ministries that owe us have requested for additional money from the National Treasury to pay,” said Mariru.
The PS told the committee that the process of handing over the three projects to mother ministries has begun.
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