Audit exposes KICC spent Sh30.9 million on hotel meetings contrary to law

An audit has exposed how the Kenyatta International Convention Centre (KICC) breached financial and governance regulations, including spending millions of shillings on luxury hotel board meetings and failing to secure title deeds for land worth Sh2.3 billion.

In her report for the financial year ended June 30, 2024, Auditor General Nancy Gathungu revealed that KICC spent Sh30.9 million on directors’ emoluments, part of which was used to hold board meetings in upmarket hotels, contrary to regulations that require such sessions to be held on official premises unless under exceptional circumstances.

“The statement of profit or loss and other comprehensive income reflects administrative costs amounting to Sh769,848,325 as disclosed in Note 14 to the financial statements. Included in the amount are directors’ emoluments of Sh30,974,681. Review of Board minutes revealed that the Centre held 13 Board meetings. However, nine (9) meetings were held outside the office premises in contravention of the Mwongozo Code of Regulations for state corporations. In the circumstances, management was in breach of the law,” reads the report.

The Mwongozo Code serves as the governance manual for state corporations, directing that board meetings be held within official premises unless compelling justification is provided. The audit, however, found no such justification for the nine meetings held in hotels.

The report also revealed that the Centre has not secured legal ownership documents for three parcels of land, including the one on which the iconic tower block stands. The parcels, valued at Sh2.3 billion, include Comesa Grounds, used for parking and Garden Square, which is currently leased to a restaurant.

“The title deed for the property is not registered in KICC’s name, despite its value being included in the financial statements,” Gathungu said.

“To date, the Centre has not secured the title deeds for the three parcels of land.”

The matter persists despite the Public Investments Committee on Commercial Affairs and Energy, chaired by Pokot South MP David Pkosing, previously directing that all land occupied by KICC be registered under its name.

Lands Cabinet Secretary Alice Wahome had earlier told the parliamentary committee that the land was secure and there were no attempts to subdivide the parcels. However, the Auditor General warns that the properties remain exposed due to the absence of proper registration under the state corporation.

The audit further flagged Sh1.4 billion in payments made to the Ministry of Defence for renovation works at KICC, which were not supported by payment certificates.

“The payments were not supported by interim certificates for payments by engineers from the Ministry of Defence. The accuracy of the Sh1.4 billion balance could not be confirmed,” reads the audit.

In addition, the report found Sh188 million in stale debts that had not been collected for over two years, with no recovery plan presented by KICC.

“The management has not provided any recoverability strategy in place to recover the outstanding amounts,” Gathungu said.

The report also cites a violation of the Public Service Human Resource Policy, 2016, over failure to meet the required employment quota for persons living with disabilities (PWDs). The law mandates that at least five per cent of public sector staff be PWDs.

“Review of the Centre bio data and personal files revealed that the Centre has three (3) employees under the Persons Living with Disability (PWDs) category, which translates to only 3 per cent of the entire employee population. This was contrary to the provision of Part B23(1,2) of the Public Service Human Resource Policy 2016,” Gathungu said.

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“In the circumstances, Management was in breach of the law.”

Further, despite recording a revenue surplus of Sh1.4 billion during the period under review, KICC underspent its budget by Sh610 million. The Auditor General warned that this under-expenditure may have compromised service delivery.