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{
"id": 1393151,
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"speaker": null,
"content": "MOTION"
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"content": "ADOPTION OF REPORT ON FINANCIAL STATEMENTS OF SELECT STATE CORPORATIONS"
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{
"id": 1393153,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393153/?format=api",
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"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
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"legal_name": "George Peter Opondo Kaluma",
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"content": " Chairperson of the Public Investments Committee on Commercial Affairs and Energy, Hon. Pkosing, is the Mover. Proceed."
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"id": 1393154,
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"type": "speech",
"speaker_name": "Pokot South, KUP",
"speaker_title": "Hon. David Pkosing",
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"content": " Thank you Hon. Temporary Speaker, for giving me this golden opportunity to move this Report this evening. Hon. Temporary Speaker, I beg to move the following Motion: THAT, this House adopts the Report of the Public Investments Committee on Commercial Affairs and Energy on its examination of the Reports of the Auditor-General on the Financial Statements of selected State corporations, laid on the Table of the House on Wednesday, 6th December 2023."
},
{
"id": 1393155,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393155/?format=api",
"text_counter": 324,
"type": "speech",
"speaker_name": "Pokot South, KUP",
"speaker_title": "Hon. David Pkosing",
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"content": "Hon. Temporary Speaker, which are those State corporations in our Report today? They are as follows: 1. Engineers Board of Kenya, (FY 2017/2018 to 2020/2021). 2. Energy and Petroleum Regulatory Authority, (EPRA) (FY 2016/2017 to 2020/2021). 3. Competition Authority of Kenya, (CAK) (FY2017/2018 to 2020/2021). 4. Central Bank of Kenya (CBK), (FY2017/2018 to 2020/2021). 5. East African Portland Cement Company (FY2018/2019 to 2020/2021). This being our maiden Report, allow me to appreciate and thank my Committee for a very good work. The Public Investments Committee on Commercial Affairs and Energy is sensitive. We cannot conclude things quickly until they are cleared. I thank my able Committee Members for persevering and waiting. This Committee is guided by public interests. Allow me, as procedure dictates, to state that the Public Investments Committee on Commercial Affairs and Energy is established pursuant to National Assembly’s Standing Order 206A, and is responsible for examining the working of public investments based on the audited reports and accounts in the sectors of energy, environment, general economic and commercial affairs. It is mandated to do the following: 1. Examine the reports and accounts of the public investments. 2. Examine the reports, if any, of the Auditor-General on the public investments. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor"
},
{
"id": 1393156,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393156/?format=api",
"text_counter": 325,
"type": "speech",
"speaker_name": "Pokot South, KUP",
"speaker_title": "Hon. David Pkosing",
"speaker": null,
"content": "3. Examine in the context of autonomy and efficiency of the public investments, whether the affairs of the public investments are being managed in accordance with sound financial or business principles and prudent commercial affairs. The Committee is limited to schedules... So, this being our maiden Report, it is important to mention that in the last Parliament, the Public Investments Committee (PIC) was auditing entire parastatals or investments. Hon. Temporary Speaker, this year it is different. That is why it is good to mention for the record that the Committee is limited to schedules of entities issued by the Hon. Speaker on 8th December 2022 pursuant to Standing Order 206(6) comprising a total… If you put all the investments we are auditing, it totals to 132 books. Maybe, there are 400 books in the entire country but in the wisdom of the House, it decided to divide them. This is because it was difficult for the Committee in the last Parliament to finish anything because the work is time consuming. The ones that I have mentioned are in the 132 books that were given to this Committee. Hon. Temporary Speaker, firstly, what is the yardstick or marking scheme when we are looking at those books that are brought by the Auditor-General? The question is, what guides the Committee in examining those books? Allow me to share with the House that we are guided by legal infrastructure, particularly Article 10 of the Constitution. It sets the principles of public finances which include openness and accountability in those agencies. Further, it includes public participation on financial matters as is described in Article 201(a) of the Constitution which talks about use of public money in a prudent and responsible way. The fundamental instrument is the Constitution which is the yardstick or mirror which guides my Committee when we are looking at those books that are brought before us. Secondly, we are also guided by Part 6 of Chapter 12 of the Constitution in terms of finances. It is good to go on record on behalf of my able Committee Members and state that Article 226 of the Constitution deals with accounts and audit of public entities. Those are very important instruments we use because Kenyans might ask what marking scheme or yardstick that we use when we are looking at those books? The Constitution gives us Article 226(2) as a marking scheme and it states that the accounting officer of a national public entity is accountable to the National Assembly for its financial management, and Article 226(5) states: “(5) If the holder of public office, including political office, directs or approves the use of public funds contrary to the law or instructions, the person is liable for any loss arising from that use and shall make good the loss, whether the person remains the holder of that public office or not.” We must be guided that if an officer commits an offence in the management of public resources, the individual knows that they are equally culpable as the institution that is punishable. Further, we are guided by Article 227 of the Constitution on the procurement of public goods and services which provides that, and I quote: “When a State organ or any other public entity contracts for goods or services, it shall do so in accordance with a system that is fair, equitable, transparent, competitive and cost- effective.’ That is what we pay attention to when we examine those particular books. We are also guided by Section 68 of the Public Finance Management (PFM) Act No.18 of 2012, which stipulates the responsibilities of accounting officers for national Government entities, Parliament and the Judiciary. To enhance accountability, the National Assembly, through its oversight role, is asked to ensure that the resources of public entities are used in a lawful, authorised, effective, efficient, economical and transparent manner. Similarly, Section 72 of the PFM Act guides this Committee in examining those documents. Fundamentally, I mention that because Kenyans will ask us what we are using to examine those books. We are guided by the Constitution and the legal infrastructure. The The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor"
},
{
"id": 1393157,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393157/?format=api",
"text_counter": 326,
"type": "speech",
"speaker_name": "Pokot South, KUP",
"speaker_title": "Hon. David Pkosing",
"speaker": null,
"content": "question is: How did we arrive where we are? My Committee held more than 38 Sittings in which we extensively examined the Reports of the Auditor-General on the audited financial statements of those 5 institutions which I have submitted to you and the House. I am inviting the Hon. Members to support. I remember in the first induction of the Liaison Committee held in Kisumu, we were guided that the Public Investments Committee should include public participation in their reporting. My Committee tried to comply. Further, the Committee also limited itself to schedules and the agencies that I have mentioned. Before I delve into those organisations that I have presented to you, what is the model of our Report? It contains the audit query, management responses and public participation. We brought in the major stakeholders that are concerned by that audit query, which is the third level of the structure of our reporting. We also have observations of the Committee. Having listened to the entities in the management report and other stakeholders who we sometimes refer to as the roundtable, we cannot conclude an audit query unless we include all stakeholders concerned and thereafter, make our recommendations. That is the structure of the Report that is before you. Allow me to delve into the organisations or agencies which we have presented to you to show how we examine this Report using the infrastructures that I have mentioned. I will start with the Central Bank of Kenya (CBK) where the Auditor-General brought in a query concerning the Kenya School of Monetary Studies (KSMS), which took us a long to examine. KSMS, as everybody knows, offers in-service training for Central Bank of Kenya (CBK) staff. For some reason, and some time back, that organisation was made like a legal entity or parastatal. It was in-between. The Board of Directors of CBK was also the Board of Directors of KSMS. So, they were earning twice. They would work at the CBK and then after that go to KSMS - and you know where it is - and earn allowances. The Auditor General said that those people were earning twice and yet, that institution should be like a department. What happened? CBK and the National Treasury, which are like shareholders, agreed at one point to dissolve it or make it a department of CBK. After everything was done, something happened, which caught the eye of the Auditor-General. They had passed a resolution to dissolve KSMS and make it a department under the CBK. Somebody in CBK wrote a letter to the Attorney- General and asked that, that process should not conclude. Then it stopped. That is why it was brought to my Committee. I think those entities should be led by the public, not individual interest. When the Auditor- General was auditing the books, she asked: ‘Why not proceed with the dissolution of KSMS?’ That is because of the reason I have just stated, double payment of directors of CBK. When we interrogated it, we brought in the CBK, KSMS, the Attorney- General and the Solicitor-General and asked them to table the reasons why it could not be concluded to dissolve it as an agency and make it a department under CBK. The National Treasury failed to defend itself before my Committee. We then said that they could not earn from both sides. Further, we asked the National Treasury where they would get money to fund KSMS, if we were to make it a parastatal. They failed because they said they could look at other financial institutions to fund it. We thought that was not a dream that could be realised. So, we recommended before the House that, that institution be made a department under the CBK. CBK defended it. One, you cannot earn from two institutions. Secondly, it is funded 100 per cent by CBK. Third, it offers in-service training to our able officers of CBK. So, there was no reason why it could not be a department of CBK. We asked ourselves what was the reason for separating the institution. The National Treasury would have no money to run it. We agreed with the resolutions that had been earlier proposed and therefore, declined the proposal by the National Treasury because we found that something was missing and some people were being driven by private rather than public interests. In that case, we recommend that KSMS be dissolved and be made a department under CBK. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor"
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"id": 1393158,
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"type": "speech",
"speaker_name": "Pokot South, KUP",
"speaker_title": "Hon. David Pkosing",
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"content": "Two, allow me Hon. Temporary Speaker, to look at East African Portland Cement Company (EAPCC), which is a Government entity that manufactures cement. It has been in real problems. If you read our Report, the Auditor-General told us that this is an institution in the Intensive Care Unit (ICU) because it is insolvent and cannot run by itself. If you look at the investments they have, their total worth against liabilities, that institution can or has collapsed, but they are fighting. We did a lot of interaction and examination when that question came before my Committee. We brought the ministries concerned with industrialisation and shareholders, including Lafarge. Lafarge is the biggest cement manufacturer in the world. They also own shares in the East African Portland Cement Company. We brought in the National Social Security Fund (NSSF), the National Treasury and everybody. We did interrogations. You can see all that in our Report. In the interest of time, we came up with some resolutions and recommendations that we request the House to agree with. One of the recommendations is a stop-gap measure. They have a lot of land. The Principal Secretary (PS) in the Ministry of Investments, Trade and Industry is also in charge of the East African Portland Cement Company. Our thinking is that we should have a Government agency that makes cement so that the Government can set the prices. We will be doomed if we allow the prices and everything else to be set by the private sector, especially at this time when we have economic strains. We should always have a Government agency that keeps on maintaining prices. You remember you and I were in the last Parliament when I was defending Kenya Airways and Kenya Railways. I was saying that the Government must have transport so that it can keep some level of pricing. I am very proud of the Standard Gauge Railway (SGR). Everybody who wants to go to Mombasa prefers the SGR, not with matatus and buses. That was a fundamental item, regardless of how it was procured. The Government must maintain enterprises so that it can control prices. I am talking about this so that even the Government can listen to this East African Portland Cement Company. Things will get out of proportion if we allow private entities to be driving all those sectors. For those enterprises to survive, we recommend that they sell part of the land. That is so that they remain liquid and be able to pay the staff. The Government can also consider privatising it. When doing so, we should caution that the Government should not privatise 100 per cent of some of those entities that we aim to privatise. Our colleagues are listening from the other side. As a Committee, we are saying that we cannot privatise our institutions 100 per cent. What if those people become rogue? What happens in future? The Government must have a hand so that, if they become rogue, they can be chased or we apply the policy of three things alias mambo matatu . We are a country of independent people. Finally, so that I allow my colleagues to contribute, is about this institution called the Energy and Petroleum Regulatory Authority (EPRA). It also came to us. The Auditor-General raised something very interesting about the CEO - the recruitment of the Managing Director at that time. The paperwork was not properly set. We were given a chance to look at that. We almost did another interview. We had an option to send the person home, because of paperwork. We brought even the people who interviewed him. We looked at whether the person was qualified. I will tell you, Hon. Temporary Speaker, that Mr. Kiptoo Bargoria is very qualified. In fact, he really helped our country during a very turbulent time in the oil sector. To be honest, he is very competent. We say in our recommendations that we did not find sufficient reason to send him home just because of a paper. It was not his problem, but that of the board. We brought in the Chairperson who is a very prominent and reasonable person in this country. Somebody decided to be cheeky. Maybe, that person plucked out a paper. Kiptoo convinced us that he is a competent Kenyan who can be allowed to complete his term. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor"
},
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"id": 1393159,
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"speaker_name": "Pokot South, KUP",
"speaker_title": "Hon. David Pkosing",
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"content": "With those very many remarks and because my colleagues and members of the Committee can fill in the gaps I may have left, I beg to move. I ask my able Vice-Chair, Dr Lilian Gogo, to second."
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"type": "speech",
"speaker_name": "The Temporary Speaker",
"speaker_title": "",
"speaker": null,
"content": "(Hon. Peter Kaluma) Hon. (Dr) Lilian Gogo."
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