The Rural Electrification and Renewable Energy Corporation (Rerec) is in the spotlight for paying three unnamed firms Sh1.6 billion for alleged land survey services.
An audit revealed that the state-owned Rerec spent the amount in the year to June 2024, claiming that the services were provided in previous years, though it did not provide evidence of the projects the companies surveyed.
The corporation could also not prove that it had plans and budgets to undertake the surveys, Auditor-General Nancy Gathungu revealed while questioning the suspicious expenditure, amid calls for an investigation.
“As disclosed in footnote 2, under Note 32 to the financial statements indicates Sh1,600,000,000 paid to three firms for land survey services is subject to investigation,” the Auditor-General said.
“The review of the balance revealed that it was for previous years for unspecified projects undertaken by the corporation. During the audit, no evidence was made available of budgeting for the services, their inclusion in the annual procurement plan, and competitive procurement,” Ms Gathungu added.
She said Rerec contravened the law by paying for services that had not been included in its budgets and annual plans, and which cannot be proved to have been rendered.
“This was contrary to Section 45(3)(a) of the Public Procurement and Asset Disposal Act, 2015, which states that all procurement processes shall be within the approved budget of the procuring entity and shall be planned by the procuring entity concerned through an annual procurement plan,” the audit says.
Rerec has properties valued at Sh115.8 billion and spent Sh11.5 billion on different projects during the year to June 2024.
The Auditor-General, however, queried several transactions that could not be supported, including expenditure reported as being for land survey.
“The accuracy, completeness, and validity of the land survey expenditure amounting to Sh1,600,000,000 could not be confirmed.”
Ms Gathungu also faulted the agency for spending Sh26.7 million during the year on airtime, out of which Sh5.66 million was more than the budgeted amount.
The audit notes that while Rerec purchased the airtime for use by its officers, the agency broke the law by buying it above the prescribed rates for particular officers.
“Review of the expenditure records together with their respective supporting documents revealed that the payments related to airtime that were paid to officers that was way above the prescribed rates in the Circular Ref. No. OP/CAB/15 dated March 5, 2010, on economic utilisation and efficient delivery of telephone services in the public service.
“A recalculation of the airtime benefit paid during the year resulted in excess payment of Sh5,666,100 for the year under review,” the audit states.
