PAC Probes Energy Ministry Over Ksh 290M Overfunding in Donor-Funded Project

The National Assembly Public Accounts Committee (PAC) has initiated an investigation into the circumstances under which the Energy Ministry received an additional Ksh 290 million from the National Treasury for a donor-funded project.

An audit by the Office of the Auditor General flagged the extra budget after it emerged that while the State Department for Energy budgeted for Ksh 90 million, it received Ksh 378 million, an over-funding of Ksh 288 million.

In the query, Auditor General Nancy Gathungu cast doubt on management’s explanation that the over-funding was as a result of the project erroneously receiving funds meant for another entity.

Members of the Public Accounts Committee (PAC) while examining the accounts for the State Department for Energy for the financial year ended June 30th, 2022, termed the transaction suspect.

The committee in a session chaired by PAC vice chairperson Tindi Mwale (Butere MP) questioned Energy PS Alex Wachira about the error and whether it is a common occurrence in government transactions.

“You said you erroneously got Ksh 288 million. How did the generous error arise? Which other entity is involved?” Rarieda MP Otiende Amolo, a member of the committee, asked.

PS Wachira was in pain to explain the “genuine error” even as the State Department responses seemed inadequate and unsatisfactory after it emerged that its written response made no reference to the extra amounts.

“You could have attached evidence to explain this further. The question we are asking is; did it go back to the sender or did it disappear from the Treasury?” Soy MP David Kiplagat asked.

MPs took issue with the department for glossing over the matter and pushed to be furnished with the agreements signed between the Treasury and the World Bank on the same.

Kibwezi West MP Mwengi Mutuse said, “It would be helpful to provide the financial agreement to determine the terms.”

The committee is also probing why the provided funds (the Ksh 90 million) was also not spent fully as envisaged.

Auditors queried the under absorption after it emerged that out of the Ksh 90 million, only 50pc was absorbed.

The ministry explained that the under-absorption was as a result of complexities in the procurement process.

However, PS Wachira said the project in question is now complete and that the funds were returned to the National Treasury.

He said the procurement procedures were undertaken using the World Bank guidelines.

“The guidelines required that we get clearance at every stage. An approval at one stage would then define what to be done next.”

But MP Otiende said the response was not congruent with the written explanation.

“If it is about the delay not just say complexity of procurement. This would invite a further explanation. The written explanation doesn’t have that detail,” Hon. Amolo said.

Treasury officials at the meeting said the cases of erroneous overfunding were not common.

“We intend to believe it is erroneous,” said CPA Lawrence Kwiriga Kimathi, a senior Principal accountant at the National Treasury.