Parliament has given the Director of Public Prosecutions (DPP) three months to prosecute officials at the Labour ministry who sold top of the range government vehicles for as little as Sh12,000 through a secret auction.
The ministry is accused of concealing the auction of 17 cars after it advertised the sale on April 7, 2017 in a local daily instead of at least two daily newspapers of national circulation contrary to Section 96(2) of the Public Procurement and Asset Disposal Act, 2015.
The House now wants Labour Secretary Ukur Yatani to discipline his principal secretary and the officers who the Auditor-General’s office accused of collusion in the tendering that led to the loss of public funds and assets.
A Peugeot 504 Station Wagon was sold for Sh12,000 while three Nissan Patrols, which had received combined bids of Sh5.2 million, were sold for Sh522,000 or 10 percent of what bidders were willing to pay for the vehicles.
“The DPP should move with speed and prosecute all those found to be culpable in the irregular disposal of the vehicles,” Opiyo Wandayi, who chairs the Public Accounts Committee (PAC), said in a report adopted by Parliament before it broke for Christmas
recess on December 5. The committee said the process of auctioning the State vehicles was irregular and value for money could not be ascertained.
“The Cabinet Secretary should discipline the accounting officer and the officers who were involved in the disposal of the assets contrary to Section 72(1) of the Public Finance Management Act, No. 8 of 2012 and surcharge the officers where the amount of loss is quantified,” the report notes.
The parliamentary committee made the far reaching recommendations following a scrutiny of the audit findings on the irregular and concealed auction of boarded motor vehicles by the State Department of Labour.
Former Auditor-General Edward Ouko singled out the sale of 17 government vehicle (GK) that were disposed of through auction.
But Ibrahim Mohamed, the Principal Secretary and accounting officer for the State Departments of Labour disputed the audit findings, arguing that the reserve prices were determined through an objective and independent process undertaken by the Ministry of Transport and Infrastructure.
“No vehicle was disposed-of at a lower price than the reserved price and therefore there was no loss of public funds and assets,” Dr Mohamed said in submissions to PAC. According to the Auditor-General, fairly new vehicles were disposed of leaving eight old vehicles grounded in the various State departments yards.
Mr Ouko said a Peugeot 504 belonging to the Ministry of Labour was sold for Sh12,000 while the top of the range MM Nissan Patrol was sold for a measly Sh145,000 despite one bidder offering to pay Sh2.1 million.
A Volkswagen Passat bought in 2010 for Sh3.5 million and with no visible damage was sold for Sh32,000.
“The vehicles were grossly undervalued with some being sold below the bid prices and some attracting extraordinary bids,” noted Mr Ouko. The PAC heard that a Nissan Patrol, GK A 692Y, attracted a bid price of Sh2.1 million but only Sh145,000 was receipted.
A VW Passat, registration GK A990T, with no visible damage had a reserve price of Sh30,000 and attracted a bid price of Sh100,000 but only Sh32,000 was received from a different bidder. GK A 488P, a Nissan Patrol had a reserve price of Sh131,000 and attracted a bid price of Sh1.3 million but only Sh250,000 was receipted
The committee noted that another Nissan Patrol registration number GK A692Y had a reserve price of Sh131,000 but attracted a bid price of Sh2.1 million only to be sold for Sh145,000.
And a Nissan Patrol, GK A253E, had a reserve price of Sh100,000 and attracted a bid price of Sh1.8 million but only Sh130,000 was receipted.
Details of the auction were also not provided for audit verification, which could have enabled identification of unpaid and unsold motor vehicles, bid process and the bidders present among others. The auditor said the winning bidders at the auction dated April 12, 2015 were required to pay 25 percent deposit at the fall of the hummer but none paid since the payment receipts are dated April 13, 2016.