Auditor-General Nancy Gathungu has questioned the move by the contractor working on the Sh148.5 million official residences of the governor and deputy governor to extend the completion deadline twice, saying this could result in loss of public funds.
The Auditor-general is concerned that the delayed completion of the projects could result in loss of public funds through cost escalation and penalties. In her report for the 2020/21 financial year, Ms Gathunju says the contractor cited Covid-19 disruption and delays in making payments.
This is comes at a time when county governments are rushing to complete construction of the houses for governors and their deputies after the Salaries and Remuneration Commission (SRC) stopped payment of house allowances for the county chiefs.
Construction of the two residences started in 2019 with the governor’s official residence being built at Endeli on the outskirts of Mbale town, which houses the county headquarters. The deputy governor’s residence is being put up in West Sabatia.
The contract was signed on February 20, 2019 and construction commenced on March 28, 2019 with an expected completion date of September 28, 2020.
According to the Auditor-General, the contractor made the first request for extension of contract on August 20, 2020, a month before the initial end date. In the request made through the Chief Officer in charge of Physical Planning and Housing, the contractor requested for an extension of the contract period by 32 weeks.
He said delayed payments and the effects of the Covid-19 pandemic slowed down work.
The request was granted on March 24, 2021, seven months after it was made and six months after the expiry of the initial contract. The contractor was given one year from February 26, 2021 to February 26, 2022 to complete the project. This was 20 weeks above the duration of 32 weeks that had been requested by the contractor.
“It is evident there was no effective contract in place from September 28, 2020 to February 26, 2021 although the management made payments amounting to Sh21 million during this time,” Ms Gathungu notes.
On January 12, 2022, slightly over a month before expiry of the first extension, the contractor made a request for the second extension of the contract by a further 32 weeks. The contractor cited the same reasons of Covid-19 disruption and delays in making payments.
At the time the contractor was seeking a second extension, the governor’s house was put at 57 per cent complete while that of the deputy was 56 per cent.
“Although the contractor provided a performance bond extension to April 23, 2022 from a local bank, there is no evidence that the request for a further contract extension was granted,” states Ms Gathungu.
On May 25, 2019, about two months into the project, SRC issued a circular limits for the construction of the governors, deputy governors and speakers at Sh45 million, Sh40 million and Sh35 million, respectively.
The Auditor-General said SRC’s circular meant the county’s project had exceeded the set limits by about Sh68.5 million. She adds that the administration wrote to SRC on April 29, 2020 requesting for an exemption since the contract had already been signed and the construction had commenced.
“However, as at the time of the audit, there was no evidence that a response had been received from the SRC,” says Ms Gathungu.
On March 7, 2022, Senate allowed construction to proceed to completion. This was after the Senate County Public Accounts and Investment Committee (CPAIC) chaired by then Migori Senator Ochilo Ayacko cleared it. At the time, construction had been halted over the SRC ceiling.
Mr Ayacko said that CPAIC noted that the county government started constructing the official residence before the SRC imposed the capping.