Senate committee demands forensic audit on Sh168 million expenditure by Kitui textile centre

A Senate committee has called for a forensic audit to investigate the expenditure of Sh168 million by the Kitui County Textile Centre (KICOTEC) during the Financial Year 2019-2020.

The decision follows concerns over missing documentation and allegations of forgery related to the funds.

The Public Investment Committee (PIC), chaired by Vihiga Senator Godfrey Osotsi on Thursday, ordered the Office of the Auditor General, the Parliamentary Budget Office (PBO), and the Committee Clerk to scrutinise the provided bank statements detailing the expenditure.

"It seems we are struggling to obtain documents to verify this Sh168 million issue. The only information we have is the bank statements. I am directing the Clerk to collaborate with the fiscal analyst at PBO and the Auditor General to analyze these statements," Osotsi said.

"This analysis will help us understand the composition of the Sh168 million and any related issues we need to consider," he added.

Kitui Governor Julius Malombe revealed that his administration's attempts to locate supporting documents for KICOTEC's expenditures had been unsuccessful.

Specifically, they could not trace the Sh48 million spent on construction during the period when KICOTEC was still under the Ministry of Trade.

"We couldn't find evidence or supporting documents for the Sh48 million spent on construction because KICOTEC was still a programme within the Ministry of Trade at the time," Malombe explained.

Efforts to trace the payments through the Integrated Financial Management Information System (IFMIS) were also futile, according to Malombe.

"Payments were made through IFMIS, so theoretically, we could trace all the payments. However, we were unable to locate any documents transferring goods and assets to KICOTEC from the Ministry of Trade," he added.

The committee's call for a forensic audit follows prior revelations that county officials in the previous administration had hired consultants to estimate the value of assets, goods, and services procured for KICOTEC. These estimates were submitted to the Auditor General for review.

Kitui Senator Enock Wambua expressed frustration over the missing documentation. "If you choose to declare KICOTEC a crime scene, Chair, that's your decision, but we are being taken in circles."

He questioned the credibility of the documentation, particularly when county officials admitted to hiring consultants to estimate costs.

"I'm surprised how people are incriminating themselves by admitting that the county didn't have documents, so they hired consultants to estimate prices in documents submitted to the Auditor General," Wambua added.

Senator Ledama Ole Kina of Narok supported the call for a forensic audit, stressing that without a thorough examination of the financial records, progress would be impossible. "It seems we're going in circles, and we're unlikely to make progress on these figures. I suggest we do a forensic audit to establish the facts."

Former Kitui Governor Charity Ngilu, who was summoned to appear before the committee, denied any wrongdoing. She defended KICOTEC, urging senators, including Wambua, to visit the facility and see the work being done there.

"Senate Mashinani visited Kitui, and Senators, including Senator Wambua, saw the good work being done at KICOTEC. Young people were being trained and given employment opportunities. Senator Wambua, kindly be a good person and visit KICOTEC and see the Sh48 million asset-building in question," Ngilu said.

Ngilu insisted that when she left office in 2022, all documentation regarding KICOTEC's expenditures was available. She also encouraged the current administration to provide the necessary financial records to the Auditor General.

"I appreciate the Senate's effort to understand what KICOTEC is and the request for the Auditor General to visit and see for themselves. KICOTEC was the county's first parastatal," Ngilu stated.

Governor Malombe, however, responded by emphasising the importance of documentation. "Even if we visit, without the required documentation, it won't help. In our inquiries, we haven't found any."

Senator Wambua echoed Malombe's concerns, criticizing the Governor for suggesting a visit to KICOTEC while critical financial documents related to the misuse of funds remain missing.

"I hope that by visiting, we can access the LSOs, tender documents, and payments for KICOTEC. If the only thing preventing this committee from getting the proper documentation is that Senator Wambua hasn't visited, I can go right now," he said.

Wambua also explained that he had refrained from visiting KICOTEC earlier, fearing that it would legitimise what he described as illegal activities.

"Through KICOTEC, county funds were lost – significant amounts of money that could have been used to improve services for our people," he said.

KICOTEC, established by Governor Ngilu in 2018 at a cost of Sh180 million, has been facing financial struggles, with auctioneers seeking to seize its property over a Sh759,760 debt owed to suppliers.

The textile factory gained national attention during the COVID-19 pandemic when it shifted to producing face masks.

The national government awarded KICOTEC contracts to produce uniforms for chiefs and police officers under then-President Uhuru Kenyatta.

However, the company's fortunes have since declined, with Governor Malombe revealing that KICOTEC incurred a loss of Sh80 million in the 2022-2023 financial year.

In 2019, the Ethics and Anti-Corruption Commission (EACC) forwarded a report to the Senate, alleging procurement irregularities and conflicts of interest in KICOTEC's establishment and management.

The EACC found that Trendy Links Ltd, a company owned by Ngilu's son, was irregularly appointed to run the facility in 2018.

Further allegations of harassment and intimidation during the land acquisition process for KICOTEC's construction have also surfaced, with top officials from the Syongilla Youth Polytechnic testifying before the committee.