EPRA under fire for Sh20m advance payment on vehicles still in production

The Energy and Petroleum Regulatory Authority (EPRA) has been faulted for paying over Sh20 million for two vehicles that were still under production in Japan, in clear violation of procurement laws that prohibit advance payment before goods are delivered.

In her latest audit report for the financial year ending June 2024, Auditor General Nancy Gathungu raised concerns over EPRA’s payment of Sh20.69 million to CFAO Motors for a Toyota Fortuner and a Toyota Hiace, despite the cars not having arrived in the country at the time. The vehicles were still being assembled in May and June 2024 when the payments were made.

According to the audit, EPRA paid Sh13.57 million for the Fortuner and the remainder for the Hiace.

The Auditor General noted that full payment was made before delivery, which went against Section 146 of the Public Procurement and Asset Disposal Act, 2015.

This law explicitly bars payment for goods before they are delivered and accepted by the accounting officer or an authorised officer.

“Management made full advance payments for the vehicles totalling to Sh20,694,911 before delivery contrary to section 146 of the Public Procurement and Asset Disposal Act, 2015, which provides that no works, goods or services contract shall be paid for before they are executed or delivered, and accepted by the accounting officer of a procuring entity or an officer authorised by him or her in writing, and that no advance payment shall be made before the contract is signed,” Gathungu said.

Despite the law, EPRA Director-General Daniel Kiptoo said the payments were made in line with the supplier's demands.

“CFAO Motors Ltd, the vehicle supplier, requires full payment before allocation and registration of vehicles, as per their standard operating policy,” he said.

Further scrutiny of the transaction revealed that EPRA issued letters confirming receipt of the vehicles on May 23 and June 25, 2024, although CFAO Motors had notified the authority earlier that the units would only be available in September and November 2024.

The Auditor-General noted that CFAO Motors had, through letters dated May 15 and June 16, informed EPRA of the delayed delivery timelines.

However, EPRA’s inspection and acceptance committee certified the vehicles as received and fully matching specifications in May and June 2024.

“However, an inspection and acceptance committee certified the vehicles as received on May 23 , 2024, and June 25, 2024, respectively, and additionally certified that the vehicles had been received and taken on charge as per order and specifications,” Gathungu stated.

Her report further indicated that as of December 2024, when the audit was concluded, the vehicles had still not been delivered to EPRA.

“As at the time of conclusion of the audit in December 2024, the two vehicles had not been delivered to the authority,” she stated in the report signed on December 27, 2024.

EPRA, however, maintains that the vehicles arrived on December 6 and December 14, 2024. Kiptoo added that the units were inspected on January 17, 2025.

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This timeline contradicts the Auditor-General’s report, which found records showing that the inspection committee had already signed off on the vehicles months earlier, when they were still overseas.