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{
    "id": 862982,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/862982/?format=api",
    "text_counter": 225,
    "type": "speech",
    "speaker_name": "Wajir East, WDM-K",
    "speaker_title": "Hon. Rashid Kassim",
    "speaker": {
        "id": 13504,
        "legal_name": "Rashid Kassim Amin",
        "slug": "rashid-kassim-amin-2"
    },
    "content": " The idea of using independent audit firms and allowing them to continue providing unqualified reports has made us realise that there continues to be pilferage of public funds. A number of them have been arraigned in court including the Kenya Power and Lighting Company (KPLC) for that matter yet they had five years of unqualified reports. This is wanting. It does not reflect transactions that have been going on in a number of organisations. So, we suggest, as are the recommendations of this Committee, that audit of all State corporations, particularly of key institutions, should be done by the Auditor-General instead of relegating the responsibility to others. One other observation that we have also realised is that there is an abuse in terms of variations which have been done on the various costs. It appears that most State corporations are not properly planning their projects. They do not give specific time frames and quotations. They seem to be doing projects without due consideration of the requirements in planning, procurement plans and costing. We have realized that a number of State corporations have a variation of 300 per cent and above. Such a variation is unacceptable. The acceptable variation is 25 per cent. One wonders when an entity conducts a project and has a variation of over 300 per cent. That is a clear indication of misuse of public funds, funds that are entitled to be used effectively to discharge the functions of that entity, for example, the National Hospital Insurance Fund (NHIF). We have also realised that in the National Social Security Fund (NSSF), a building of 15 storeys went to six storeys yet the financial aspect has never changed. That is an indication to equally suggest that there was no proper planning for that kind of a project. Most State corporations do not have confirmed board membership. You will find that some boards do not have even chairmen. A number of boards have not been properly constituted. So, it is a recommendation of this Committee that all boards should be properly constituted before they undertake adjudication of certain concerns. They should be properly constituted. They should have the board, a chairman and the various board committees, so that they have adequate quorum to execute as required. Naturally, there are certain boards, particularly the NSSF Board, which have realised that even the head of department and the CEO have been acting for over four years. You wonder how an institution has a CEO acting in the position for years. Certain directors are equally in acting positions. There is no confirmed board to transact which cripples such organisations. Indeed, it is a recommendation of the Committee that all boards be properly constituted with substantive CEOs and directors. The boards should be properly constituted within a period of six months as suggested in our concerns, as a recommendation. One other critical observation that we made, as we adjudicated a number of these issues, is that State corporations are making investments in banks that are likely to collapse. The Kenya Railways Corporation (KRC) had invested about Kshs800 millions in the collapsed Chase Bank and within a period of three or four months thereafter, the bank collapsed. That leads to a loss of that amount of money. Similar investments have been done by the NHIF and other State corporations. The NSSF does the same. Generally, there should be due diligence and proper investment done by the State corporations before they go into short-term investment of their funds. The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}