Revealed! Fresh Audit places Kenya Pipeline on the Spotlight over Ksh 800m scam

A new scandal has erupted at Kenya Pipeline Company (KPC) following revelations the company made irregular payments amounting to Sh800 million. This comes at a time when former top officials of the company are facing graft charges over the construction of Sh1.7 billion Kisumu Oil Jetty.

In his report for the year ending June 2018, Auditor General Edward Ouko also questioned the unapproved recruitment and appointment of staff to non-existent positions as well as irregular purchase of motor vehicle accessories.

Ouko says in the report the corporation paid Sh97.6 million contrary to the Company’s Staff Rules and Regulations to 231 staff members who were earning responsibility allowances. The company spent Sh5.8 billion on salaries and allowances in the year ending June 2018.KPC acting managing Director Hudson Andambi, however, defended the agency saying the money was not for overtime allowances but salaries of the entire workforce.

“There is no way we can have such a huge amount of money paid as allowances, the true picture is that the amount reflects the money paid to our staff,” he said. He said a huge chunk of the allowances remunerated casual workers at the Standard Gauge Railway Phase Two. Andambi, however, said the corporation not defend any official involved in the irregular purchase of vehicles noted in the report by the AG.

The Auditor General in his report says most of the allowances exceeded the amount provided for.“In some instances, the annual overtime allowances paid were as high as 250 per cent of the annual gross salaries payable, implying that the claimants worked for more days than were available in the financial year,” the report read.

Ouko said it was not possible to confirm the regularity and probity of Sh269.5 million incurred on the allowances. The corporation is also on the radar over the expenditure of Sh9 million on purchase of motor vehicle accessories.

The items were bought as low value procurements through petty cash payments and reimbursement claims lodged by staff since the purchases occurred on regular basis. Ouko says the transactions were irregularly made and receipted and that use of the majority of the items for the company’s benefit cannot be confirmed.

The company is also being queried for allowing 13 Oil Marketing Companies (OMC’s) that have negative stock balances amounting to 4,435 cubic metres to overdraw products contrary to the Transport and Storage Agreements procedures.