Kenya School of Law in a spot over Sh358 million library project

An audit has flagged Sh358 million spent by the Kenya School of Law (KSL) on the construction of a library and a moot court.

The project, according to Auditor General Nancy Gathungu in her audit report for the period ending June 30, 2023, which began in June 2013, remains unfinished, prompting questions about the value obtained for the funds used.

She reported that the project, awarded to a contractor for a total of Sh488.7 million, was initially scheduled for completion in three years, by September 2016.

However, inspections revealed that, despite the contractor's continued presence on-site, no significant progress has been made, seven years beyond the original deadline.

"Physical inspection and verification of the progress of works, however, revealed that although the contractor was still on site, the works had not been completed, seven years after the expected completion period," Gathungu said.

She highlighted a lack of transparency, noting that the management failed to provide crucial site inspection reports and meeting minutes for audit verification.

Additionally, the contractor did not adequately justify the delays in completing the moot court.

"In the circumstances, it was not possible to confirm that the school obtained economy and efficiency from the expenditure of Sh358,771,054 million incurred on the project," the auditor noted.

The audit also raised questions about payments made to the contractor.

On June 14, 2023, KSL paid Sh7.2 million as liquidated damages for the delayed library and moot court. The damages were calculated at Sh400,000 per week for 18 weeks.

"It was not clear why a project behind schedule is paid for liquidated damages instead of being penalised for delayed completion and why despite the extension granted, the project has not been completed and handed over to the school, 12 years from its inception," Gathungu said.

"In the circumstances, there was no economy, efficiency and effectiveness in the delivery of the services to be offered by the Moot Court to the citizens," she added.

Bank reconciliation statements

The audit report also revealed that KSL management failed to submit bank reconciliation statements for accounts held at Absa Bank, Equity Bank, and Coop Bank to the National Treasury, violating Regulation 90(1) of the Public Finance Management (National Government) Regulations, 2015.

"In the circumstances, management was in breach of the law," Gathungu stated.

Another area of concern was the irregular renewal of a medical insurance policy at a cost of Sh23 million.

The advertisement for insurance services indicated a one-year duration. However, the contract specified a term from July 1, 2021, to June 30, 2022, with the possibility of renewal based on satisfactory performance.

"Therefore, the renewal in the year 2022/2023 contravened Article 227 of the constitution, which requires a system that is fair, equitable, transparent, competitive and cost-effective," Gathungu said.

Additionally, the KSL board of directors is under scrutiny for exceeding the allowed number of meetings.

Government guidelines limit board meetings to six per financial year, yet KSL held 30 meetings during the review period.

"The meetings were held contrary to Circular No. REF: OP/CAB.9/1A dated March 11, 2020, which states for the avoidance of doubt, the board meetings shall be restricted to a minimum of four and capped at a maximum of six for each financial year," the auditor noted.

"No approval for the extra board meetings by the relevant Cabinet Secretary, in consultation with SCAC, was provided for audit verification. In the circumstances, management was in breach of the law," she added.

KSL management was also criticised for not addressing issues raised in previous audits or providing explanations for failing to implement recommendations.

Moreover, the school did not remit value-added tax totalling Sh26 million during the review period, violating the law.

"In the circumstances, management was in breach of the law," Gathungu added.