Kibaki office owes KICC Sh36m for rent, says auditor

The office of retired President Mwai Kibaki is on the spot for defaulting on rent amounting to Sh36 million at the Kenyatta International Convention Centre (KICC) in a period when the government had bought an office block to host the retired Head of State and his staff.

A new audit shows that Mr Kibaki’s private secretary’s office failed to pay rent for the three years it was domiciled on the 18th floor of KICC. Prof Nick Wanjohi served as Mr Kibaki’s private secretary between 2012 and 2017.

Prof Wanjohi was expected to occupy space at the retired president’s office block in Nyari Estate, Nairobi, that was bought in 2013 by the government for Sh250 million.

The Auditor-General’s office informed Parliament last week that KICC failed to provide the tenancy agreement for the space, but said that the accumulated rent arrears of Sh36 million was unlikely to be recovered amid fears of lack of a budget allocation for leasing office space.

“Available information indicates that the corporation’s (KICC) 18th floor was occupied by the Private Secretary to the third President for a period July 1, 2013 to July 1, 2016 accruing a total debt of Sh36,092,972 though no lease agreement was availed for audit review,” Auditor-General’s office said in a qualified audit opinion of KICC books of accounts for the year to June 2018.

“The likelihood that the debts will be recovered remain doubtful.”
The audit also revealed KICC’s weakness in collecting debt, especially rent from State agencies that have occupied space in the iconic building.

It is owed Sh908,062,000 and Sh696,789,911 of that amount – the equivalent of 76 percent – has remained outstanding for more than three years.

The bulk of the debt is owed by various government ministries and departments.

“In particular, the National Assembly owes Sh47,311,344 and which has been outstanding for considerably long period of time,” says the audit presented to Parliament, which also says that the debts are not recognised as payables or pending bills in the books of the State departments and agencies that owe KICC.

“In view of the foregoing, it has not been possible to confirm the accuracy and recoverability of trade and other receivables balance of Sh980,062,000 as at June 30, 2018,” the report says.

The law stipulates that taxpayers provide Mr Kibaki and his staff a furnished office. The government purchased the Sh250 million office block in Nyari Estate following a public outcry after the Treasury had set aside Sh700 million to acquire new offices for Kenya’s third president.

Mr Kibaki stepped down from the presidency in 2013 after serving two terms.
Besides the amount owed by the office of the retired president, the auditor further raised the red flag over KICC management’s failure to recover outstanding debts from staff who have since left the organisation. KICC advanced staff car loans and other advances amounting to Sh10,350,000 in the year to June 2018.

“However, it was observed that some of the staff that resigned or were terminated left without being cleared by the corporation.

“Some have left with debt owed to the corporation in terms of car loans and advances,” the audit report says.