REREC Paid Sh1.6 Billion to 3 Consultancy Firms For Doing Nothing, Audit Reveals

The Rural Electrification and Renewable Energy Corporation (REREC) is facing serious questions after an audit exposed suspicious payments totaling Sh1.6 billion to three unnamed consulting firms for alleged land survey services that cannot be verified.

Auditor-General Nancy Gathungu revealed that the state corporation made these payments during the financial year ending June 2024, claiming the services were provided in previous years. However, REREC failed to produce any evidence of the projects these companies supposedly surveyed.

“The review of the balance revealed that it was for previous years for unspecified projects undertaken by the corporation,” Gathungu stated in her audit report. “During the audit, no evidence was made available of budgeting for the services, their inclusion in the annual procurement plan, and competitive procurement.”

The audit findings indicate REREC violated procurement laws by paying for services that were never budgeted for and cannot be proven to have been delivered. This contravenes Section 45(3)(a) of the Public Procurement and Asset Disposal Act, 2015, which requires all procurement to be within approved budgets and planned through annual procurement plans.

With properties valued at Sh115.8 billion and annual project spending of Sh11.5 billion, REREC’s financial management is now under intense scrutiny. The Auditor-General noted that “the accuracy, completeness, and validity of the land survey expenditure amounting to Sh1,600,000,000 could not be confirmed.”

Adding to the corporation’s woes, the audit also flagged excessive spending on airtime, with REREC exceeding its budget by Sh5.66 million out of a total Sh26.7 million spent on mobile phone services for officers.

The mysterious Sh1.6 billion payment is now subject to investigation, raising serious questions about financial controls and oversight at one of Kenya’s key infrastructure development agencies. The case highlights the ongoing challenges in public sector financial management and the need for stronger accountability mechanisms in state corporations.

Parliament has since directed REREC to furnish the Auditor-General with all relevant documents within five days to facilitate the ongoing investigation.​​​​​​​​​​​​​​​​