A report by the Auditor General has revealed that the National Youth Service (NYS) cannot account for over Sh1 billion, which was possibly lost through irregular expenditures and payments.
The audit report by Auditor General Nancy Gathungu flagged irregular expenditures amounting to Sh303 million, along with other unexplained illegal payments totalling millions of shillings.
This report covers the period up to June 30, 2023.
According to the report, taxpayers may have lost over Sh300 million paid to contractors for projects that have stalled for several years. Ms Gathungu reports that some projects were declared shoddy, resulting in no value for money.
An example of such a case is the 12-unit flat at the Vocational Training Institute in Nairobi’s Industrial Area project, contracted for Sh49,105,721. The contractor abandoned the site after receiving the first payment of Sh7,111,432.
According to the audit, the NYS re-advertised and awarded the completion contract at Sh61,098,319 with a timeline of 52 weeks commencing on November 26, 2019.
However, a physical inspection in March 2024 revealed that the project was still incomplete, despite Sh23,000,000 already being paid and the contractor abandoning the site.
“In these circumstances, the NYS has not realized value for the Sh30,111,432 spent on the project,” reads the report in part.
In another instance, the NYS contracted for the supply, delivery, and installation of water tanks and booster pumps at the same institute for Sh11,715,396 over 16 weeks ending October 31, 2020.
The contractor abandoned the site due to non-payment of Sh5,770,669.
The NYS also contracted for a four-story classroom block and workshops at the NYS Engineering Institute in Ruaraka for Sh88,794,355. The project was initially planned for 52 weeks ending June 9, 2012, and was later extended by 31 weeks to January 12, 2013.
Construction stalled in 2017 after Sh81,884,550, representing 92 per cent of the contract sum, had been paid.
A review in February 2024 revealed incomplete works, including electrical, plumbing, and drainage, originally valued at Sh4,778,265 as per the State Department of Public Works appraisal report dated April 5, 2022.
Another instance involved a contract awarded by NYS for a double-span kitchen, dining, and barracks at the NYS Engineering Institute in 2011 for Sh192,000,000. The contractor abandoned the site after receiving Sh186,248,573.
A site visit in March 2024 revealed the project’s deterioration due to significant visible cracks.
NYS administration blames the stalling of completion on delayed payments. The report states that NYS management has not made any efforts to invoke the relevant clauses of the contract to surcharge the contractor for delayed completion. In these circumstances, value for money has not been realized even 12 years after construction began.
The issue of delayed payments also extends to Sh99 million paid in salaries outside the Integrated Personnel and Payroll Database (IPPD) system. These payments, purportedly made to trainers and lecturers, lacked supporting documents.
“Payments amounting to Sh99 million were processed outside the Integrated Personnel and Payroll Database (IPPD). Further, the criteria used in hiring the tutors were not provided for verification. In these circumstances, NYS breached public service policies and procedures. Millions of taxpayers’ money may have ended up in the hands of ghost workers,” states the audit.
Additionally, Sh740 million in outstanding payments made were not supported by a ledger and payment vouchers.
The report also revealed that taxpayers could be losing millions of shillings due to the manual collection of NYS revenue.
“A review of revenue management revealed that revenue from farming, security services, and machinery hire is still manual and has not been digitized. The benefits of automation, such as invoicing, revenue collection, reconciliations, and banking, have not been realized, and gaps in manual systems may lead to undetected revenue loss,” the report said.
“In these circumstances, the effectiveness of internal controls on revenue collection could not be confirmed,” it reads.
The audit also highlighted excess staff in senior management positions such as assistant directors, senior superintendents, and superintendents, who are drawing millions of shillings in salaries.
“While the service’s approved number of assistant directors was 14, there were 16 in post. At least 52 senior superintendents were holding office against an authorized establishment of 36,” the audit revealed. Auditors also found 62 superintendents holding posts against the approved count of 57, indicating irregularities.
It appears that NYS assets, including land covering thousands of acres, are also at risk of loss as the service has not maintained a complete and accurate assets register.
– By Ann Precious Kinyua
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