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"id": 141893,
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"content": "The Committee made several observations and recommendations. If these issues were taken into account and implemented, there would be enhanced accountability, effectiveness, transparency, efficiency, prudent management and profitability in State Corporations and the public investment sector as a whole. Mr. Temporary Deputy Speaker, Sir, this House is invited to note that there exists a huge backlog of unexamined reports of the Controller and Auditor-General on State Corporations. The Committee managed to reduce this backlog by examining two or more of the said reports for some corporations. To this end, the Committee has brought up to date the following State Corporations:- the CDA, Communication Commission of Kenya (CCK), Kenya Maritime Authority (KMA), Jomo Kenyatta University of Agriculture and Technology (JKUAT), Catering and Tourism Development Levy Trustees (CTDLT) and the National Hospital Insurance Fund (NHIF). The Committee endeavoured to update accounts for State Corporations that had been outstanding since mid 19990s. These included the Bomas of Kenya, Egerton University, the Industrial and Commercial Development Corporation (ICDC), the Coffee Board of Kenya, the Kenya Industrial Research and Development Institute (KIRDI) and the Ewaso Nyiro South Development Authority (ENSDA). Mr. Temporary Deputy Speaker, Sir, I hereby give a summary of the Committeeâs observations on the operations and management of the various State Corporations. One of the major issues that we were able to observe was improper book-keeping. The Committee observed that the books of accounts in various State Corporations were inaccurate and incomplete, while others were non-existent, having been lost completely under doubtful circumstances. The Committee observed that accounts for some State Corporations were in arrears over a long period of time, owing to the absence of critical accounting records. The Committee noted that the following State Corporations failed to maintain proper accounts and that reconciliation of the same was outstanding to date: the Coffee Board of Kenya, ENSDA, the Kenya Railways Corporation (KRC) and KIRDI. Mr. Temporary Deputy Speaker, Sir, in view of this, the Committee recommends that CEOs of State Corporations ensure that proper books of accounts are kept, and that reconciliation of books of accounts is undertaken on a regular basis. The Committee further recommends that CEOs comply with both International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS). The other serious issue that we were able to note is irregular award of contracts. The flouting of the procurement procedures is an issue that remains very common in nearly all the State Corporations. The Committee noted, with apprehension, the total disregard of procurement procedures, leading to huge losses by the State Corporations. It is noteworthy that there are cases where procurement of goods and services is a one-man show. Mr. Temporary Deputy Speaker, Sir, in some cases, State Corporations entered into several contracts for various works without the requisite approval from the parent Ministries and the Treasury, while in other cases, the CEOs and the Tender Committees awarded contracts without due regard to the procurement Regulations on tendering for works in excess of Kshs5 million. An example is a tender award by Kenyatta National Hospital (KNH) for the Main Casualty Department at an initial cost of Kshs65,838,389. The Committee noted with"
}