Taxpayers paid Sh2.78 million per month for 21 months for unoccupied space after the Energy and Petroleum Regulatory Authority (Epra) failed to partition it in time for occupation.
Auditor-General Nancy Gathungu says the State agency entered a lease agreement with a landlord for office space on a fifth floor at Sh2.78 million per month payable quarterly in advance.
“However, physical verification of the premises confirmed that the authority had not occupied the office as from July 1, 2020, until the time of the audit in March 2022 despite paying rent of Sh6.68 million. According to the management, the non-occupancy was a result of the long period of partitioning, fittings, and remodelling of the office to conform to the authority’s needs and brand,” she said.
This means the space remained unoccupied for 21 months with Epra parting with a total of Sh58.38m for what it didn’t use.
“In the circumstances, the authority did not obtain value for money on expenditure,” the Auditor-General said.
The wastage adds Epra to a list of State agencies that have recently been flagged for splashing millions of shillings of taxpayer funds in rent for spaces not used.
Last year, the Auditor-General chided the Kenya National Bureau of Statistics (KNBS) for wastage after taxpayers paid Sh299,234 daily as rent for 545 days for unoccupied space after the agency failed to partition it in time for occupation.
The audit office pointed out in a report that KNBS paid rent of Sh163.083 million between October 2017 and June 2019 for their headquarters at Real Towers when the premises were not occupied.
This means that the KNBS paid Sh9 million per month for 18 months as it waited for a contractor to complete the partitioning of the new offices in Upper Hill, Nairobi.
The agency had been given a three-month grace period before the rent started accumulating in January 2018.
“Value for money was not realised on the payment of the lease amount of Sh163,083,000 between October 2017 and June 2019 when the premises had not been occupied and the Bureau was in breach of law,” the report said.
KNBS director-general Macdonald Obudho told lawmakers that the delay in partitioning the building was caused by the main contractor and that impacted the other contractors, who could not conclude their works on time.
The contract was extended twice and two default notices were issued by the Public Works department, which was supervising the work.
