AG exposes fraud in State Corporations

    Auditor General Edward Ouko has exposed the fraud that is officials running State corporations. This is after the agencies failed to account for monies allocated for various projects. According to the AG, the officials deliberately paid out cash for ghost projects. There was also evidence of inflated contract prices as well as violated procurement laws in the course of their duties.


    The managers of Semi-Autonomous Government Agencies failed to account for the billions received from the National Treasury to fund projects and services such as air transport services, cheap power, education, quality healthcare, water, infrastructure and nuclear energy. One such corporation is the Kenya Airports Authority (KAA), which is on the spot for fraudulent practices.

    Also read: NSSF Management fails to account for Hazina Towers construction costs


    Similarly, the National Hospital Insurance Fund (NHIF) is also on the spot for escalating the cost of building the NHIF multi-storey car park by 337% of the original cost. As such, for failing to justify the increase in money, the National Social Security Fund (NSSF) risks losing more than Sh1.5 billion from unremitted members’ contributions, non-collection of rent, irregular land transfers and stalled projects.

    Kenya Medical Supplies Authority is on the spot for failing to acquire ownership documents for several pieces of land valued at Sh180 million in total. Moreover, Geothermal Development Corporation (GDC) failed to remit taxes amounting to Sh405 million to Kenya Revenue Authority, and continues to attract penalties. The report further indicates that in the year under review, GDC sold steam worth Sh3.1 billion from the 59 wells at the Olkaria geothermal station to KenGen. However, only the cost of 26 out of 59 wells have been recognized in the financial statements.


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