Auditor General reveals how NYS lost millions in stalled projects

A new report by Auditor General Nancy Gathungu has exposed procurement irregularities at the National Youth Service (NYS) where contractors pocketed money but never completed projects.

In her latest audit of NYS for the 2023/2024 financial year, Gathungu laid bare the deplorable state of operations at the service, disclosing how millions could have been plundered, assets stolen and land left at the mercy of grabbers.

The report details that the NYS’s property, plant and equipment was valued at Sh29.5 billion, but the audit established that NYS did not maintain a complete and accurate asset register.

Missing from the register, Gathungu noted, was information relating to the type of asset, date of acquisition, supplier, cost, location code and current values. The audit report noted that the assets had not been tagged for tracking and identification.

Land measuring 2,247 hectares in Yatta, Mavoloni, Athi River, Mombasa Technical Institute and Mwatate has also been encroached and was under threat of grabbing.

More concerning is that 42 out of a total of 58 parcels of land do not have title deeds, while several pieces of land, including in the engineering unit at NYS headquarters and in Mombasa, have been encroached on by private developers.

The financial impropriety is also highlighted through the unsupported adjustments of Sh742 million in asset valuations, made without schedules or expert reports.

“In the circumstances, the accuracy, completeness and valuation of the property, plant and equipment balance of Sh29.5 billion could not be confirmed,” reads the audit report.

Gathungu also noted that Sh315.4 million meant for the payment of youth who had engaged in a six-month contract for the youth empowerment programme between September 2014 and February 2015 could have been misappropriated.

“Management explained that it had dispensed some payments and is making efforts to trace and pay the remaining youths. However, a schedule and confirmation for those who have been paid were not provided for audit verification,” she added.  

And further compounding the situation is the revelation of stalled projects that have seen millions of Kenyans’ funds going down the drain. One of the projects is the stalled construction of a double-span kitchen, dining and barracks at the NYS engineering institute in Ruaka. According to the audit, the cost of construction of the project was Sh192 million and commenced in June 13 2011 and was to be completed by March 2017 after a period of extension.

The contractor, the report shows, however, abandoned the site after receiving payments totalling Sh186.2 million.

“A physical inspection of the project in March 2023 revealed that no construction was ongoing at the site and the contractor had abandoned the site…in addition, management had not made any efforts to invoke the relevant clause of the contract to surcharge the contractor for delayed completion,” it noted.

Gathungu is convinced the value for money pumped into the project had not been realised, 13 years after the construction commenced.

In another instance, it was the delayed construction of housing units at a vocational training institute in an industrial area, where the NYS entered into a contract for the construction of a 12-unit flat at a contract sum of Sh49.1 million. However, the contractor abandoned the site after receiving the first payment of Sh7.1 million. The management, however, re-advertised the works and awarded the contract for completion for Sh61.09 million, commencing November 2019.

“Physical inspection conducted in October 2024 revealed that the project was incomplete and the contractor had abandoned the site after receiving payments totalling Sh23 million. In the circumstances, the Service has not realised value for money on the expenditure of Sh30.1 million spent on the project.”

Additionally, the Service was cited by the Auditor for failure to adhere to employment requirements for persons with disabilities (PWDs). Staff records detailed that 35 staff members were in the list of PWDs, representing 1.42 per cent of the total staff members, which was less than the required five per cent. This is contrary to the Public Service Commission Human Resource Policies.

Its failure to enforce gender balance in employment was also highlighted as a point of concern. Out of 2,465 employees, 1,701 or 69 per cent were male, while 764 or 31 per cent were female.

“In the circumstances, management was in breach of section 32(2) of the Public Service Commission Human Resource policies, May 2016, which requires the Government to have a gender balanced civil service by ensuring that not more than two-thirds of positions in its establishment are filled by either gender,” observed Gathungu.