Internal wrangles at REREC affect projects worth Sh15 billion
A Kenya Power technician at work.
What you need to know:
- Hived off from Kenya Power, the corporation has hardly had an orderly transition of chief executives.
- Its first CEO Zachary Ayieko quit office in 2013 after a fallout with the board, ending his five-year stint.
Projects worth Sh15 billion have stalled and cannot kick off due to internal wrangles at the Rural Electrification and Renewal Energy Corporation (REREC).
Operations of the corporation have also been greatly affected by a number of court cases and board wars that cannot allow any meaningful development to go on.
Hived off from Kenya Power, the corporation has hardly had an orderly transition of chief executives. Its first CEO Zachary Ayieko quit office in 2013 after a fallout with the board, ending his five-year stint.
His successor, Ng’ang’a Munyu, was ousted in 2017 to pave way for an audit into how billions of shillings were spent in a primary schools electrification scheme, prompting his arrest last year.
The agency has also been unable to fill board seats after the High Court blocked eight members following a dispute on their appointments.
At the moment, already the agency chief executive Peter Mbugua and ten other top managers have been suspended by the board.
However, the CEO has moved to court seeking to be reinstated and also challenging the appointment of the board.
The board was last month suspended by the High Court but got a stay after appealing the decision.
Despite the reprieve from the Court, the board members are however still being haunted by a petition that was filed last week at the Ethics and Anti-Corruption Commission (EACC) seeking to have them charged with abuse of office.
The petition by Mr Frank Karanja wants members of the board charged with abuse of office, corruption and irregular conduct.
“It is of great concern that the corporation which is funded by the Kenyan tax payers would transact and accrue financial obligations without the existence of an approved procurement plan and budget for the current financial year,” Mr Karanja says in the petition.
A report by the agency’s internal Audit Directorate revealed fraudulent survey payments made from the corporation to three companies, Theodore Surveys, Geospatial Engineering & Business consultants and Universal Land Services.
The fictitious payments were made using power distribution projects that do not exist, however, respective payments are being posted to old completed, but yet to be capitalized projects that still have some cash balances.
“The affected projects where these monies are posted were to be completed as far back as financial 2010/2011,” reads the report.
From the Internal Audit review of the payments, it is confirmed that an amount of Sh1.6 Billion was paid fraudulently, from January to June 2022(6 months) these fraudulent payments were paid through our Standard Bank Account.
The officers involved in the Finance Department include Ken Mugo who prepared the payment vouchers, Collins Maubi who checked the payment vouchers and Emmanuel Lelgo who approved the payment vouchers. Certificates of completion for payments were being prepared by Ibrahim Ongeri, Checked by C. Mukhwana and approved by Simon Ndirangu.
“Through our SAP accounting system, Ibrahim Ongeri was also noted to have raised the respective purchase orders, while Collins Maubi approved the same purchase orders, these are functions that are supposed to be carried out by the procurement Department,” the report reveals.
In its findings, the auditors note that the Manager Finance and Account, Davis Cheruiyot ought to have noticed the irregular payments that were made through the system at short intervals as the head of the department.
Consequently, the board suspended Mbugua and 10 others pending forensic investigation from the relevant bodies.
“The bodies investigating need to confirm further fraudulent payments, ascertain the extent of the amount that was paid fraudulently which has led to embezzlement of public funds and bring the culprits to book,” the auditor states.
The board is chaired by Wacuka Ikua. Members are Hassan Sora, Rhoda Njuguna, Wahome Gitonga, Mary Mwiti, Eva Sawe, Samwel Mugo and John Kawamunga.
Subsequent to their appointment as members of the Board of Directors and between 27th April 2022 and 26 August 2022, which is hardly four (4) months ago, they have held a total of at least nine (9) Board meetings.
