Auditor General Nancy Gathungu has unearthed how Kenya’s missions abroad are engaged in irregular expenditure, lacking adequate procurement documents to guide processes.  

She also expressed concern over the poor conditions of some buildings and structures housing embassies and high commissions.

In her report for the Financial Year 2023/2024, Gathungu revealed that a review of the missions’ processes for sampled procurements during the year showed that most missions did not have a list of registered suppliers, lacked standardised procurement documents, and failed to adhere to procurement requirements such as issuing quotations to suppliers.

She disclosed that the use of standard tender and prequalification documents in host countries was challenging due to different and unique legal, regulatory and business environments.

“The Missions, therefore, lacked guidelines to effectively undertake procurements in the host countries. Lack of Missions’ specific guidelines may have affected the efficiency of procurement processes, hence impacting negatively on service delivery by the Missions,” the report reads, adding that the State Department, in collaboration with the Public Procurement Regulatory Authority (PPRA), should develop procurement guidelines for use by foreign Missions where it may not be possible to comply fully with Kenyan procurement laws and regulations.

Gathungu further regretted that the State Department incurred an expenditure of Ksh854.5 million in foreign exchange losses.

These losses were attributed to the fact that the budget was in Kenyan shillings while the expenditure at the Missions was in the local currency of each host country.

According to her, no special consideration was made for the State Department for Foreign Affairs to absorb the losses and disburse funds intact, contrary to Section 7 of the Foreign Service Act, 2021.

The Act states that the National Treasury shall compensate the Ministry for any loss resulting from foreign exchange adjustments on funds sent to Missions abroad.

Financial discrepancies

“This negatively affected the liquidity of the Missions, resulting in pending bills in some of the Missions as they did not receive their full funds as budgeted. The State Department should continue engaging the National Treasury to create a budgetary provision to hedge against foreign exchange losses,” the report notes.

In addition, the report also raises concerns over the variances between the supporting schedules provided to support the Missions’ cash and cash equivalents balances, and the Missions’ cash books.

Some of the discrepancies, the report says, shows for instance that the cash book for the Kenya Mission in Gaborone (Botswana) for April and May 2024 reflected total payments of US$247,166.74 equivalent to Ksh32.3 million but a recasting performed on the cash book revealed a total of US$246,266.74 equivalent to Ksh32.2 million resulting in an unexplained variance of US$900 (Ksh117,900) while in the case of Kenya Mission in Algiers (Algeria), the cash book reflected that there were long outstanding payments in cash book not recorded in bank statement of US$19,500 which had been outstanding from 2020/2021.  

Although this amount was cleared during the year under audit, the report says that the clearance entries could not be traced in either the cash book or the bank statement.

The June 2024 bank reconciliation statement for the Kenya Mission in Khartoum, the report says, included reconciling items amounting to US$32,168.87 and US$246,534.01 relating to a local currency account and a foreign currency account, respectively, which were not dated.

“In the circumstances, the accuracy and completeness of the cash and cash equivalents balance of Ksh3,331,379,195 could not be confirmed,” the report notes.

Regarding the status of various missions, she revealed that physical verification of sampled Kenya missions abroad showed unsatisfactory management and maintenance of properties and assets.

According to her, several cases of leaking ceilings, cracks in walls, peeling paint, damaged roof tiles, corroded gutters, and defective gate hydraulics were observed.

In addition, the report says that some missions lacked CCTV cameras for monitoring activities within the building, had no security guards, and in some, the paint had peeled off the walls.

The missions in question include Kenya High Commission in Abuja, Nigeria; the Kenya Mission in Beijing, China; the Kenya Mission in Berlin, Germany; the Kenya Mission in Dar es Salaam, Tanzania; the Kenya Mission in Paris, France; the Kenya Mission in Riyadh, Saudi Arabia; and the Kenya Mission in Tel Aviv, Israel.

“In the circumstances, the State Department did not comply with Section 72(1)(a) and (b) of the Public Finance Management Act, 2012, which requires the Accounting Officer for a national government entity to be responsible for the management of the entity’s assets and liabilities and manage those assets in a way which ensures that the national government entity achieves value for money in acquiring, using and disposing of those assets,” said Gathungu.

For instance, she revealed that the renovation of two staff houses had stalled since 2020 despite an amount of Ksh3.4 million having been spent on the project, while in another case, a residential property was sold in 2021, but proceeds amounting to Ksh20 million had not been remitted to the Exchequer.

In addition, the report says that some missions lacked ownership documents for the properties.

“The State Department did not therefore comply with Section 72(1)(a) and (b) of the Public Finance Management Act, 2012, which requires the Accounting Officer for a national government entity to be responsible for the management of the entity’s assets and liabilities and manage those assets in a way which ensures that the national government entity achieves value for money in acquiring, using and disposing of those assets,” the Auditor General’s report adds.

Deplorable conditions

In the case of the Kenya Mission in Berlin, Germany, the report says the mission had a damaged roof and leakages at the attic terrace balcony, cracks on the walls, a faulty gate hydraulic and locking system, and damage to the verandah and exterior ceiling on the first floor. Paint was peeling all around the building, among other defects.

In the case of the Kenya Mission in Beijing, China, the Chancery building, located in the same compound as the ambassador’s residence, had no CCTV cameras to monitor activities within the building. The report also noted the absence of smoke detectors, essential for providing early warnings in case of a fire outbreak.

With regards to the Kenya Mission in Tel Aviv, Israel, the report says that the building has no insurance cover, while there are no documents to prove that Kenya owns various sub-parcels.

According to the report, Kenya owned the registered office known as sub-parcels 11, 12, and 13 in parcel 405, Block 6109, on which the building named Beit Zaksenberg stood as per the sales agreement dated December 1996.

The agreement states that the sellers undertake to register the right of ownership to the unit in the name of the Purchaser, at the Lands Registration office, within 24 months of the date of handing over possession.

However, there was no evidence provided of a registered right of ownership to the sub-parcels 11, 12 and 13. In addition, the building did not have any insurance coverage.

“In the circumstances, the State Department did not comply with Section 72(1)(a) and (b) of the Public Finance Management Act, 2012 which requires the Accounting Officer for a national government entity to be responsible for the management of the entity’s assets and liabilities and manage those assets in a way which ensures that the national government entity achieves value for money in acquiring, using and disposing of those assets,” reads the report.

At the Kenyan Commission in Abuja, Nigeria, the report says that physical verification of the building revealed that the roofs of the Chancery Building, the high commissioner’s residence and the staff quarters were leaking and required urgent renovation.

In addition, the report says that motor vehicle records revealed that a Mission vehicle was stolen in February 2022, and the theft was reported to the relevant authorities.  

“Although the case was said to be under investigation, the matter had taken too long, and the mission was yet to make an insurance claim,” the report reveals.