Monday, 5 October 2015

Globe-trotting CA executives pocket Sh307m in one year

Francis Wangusi, CA director-general. PHOTO | FILE
Francis Wangusi, CA director-general. PHOTO | FILE  

Senior Communications Authority of Kenya (CA) executives pocketed Sh307.2 million in tax-free travelling allowances in the year ended June 2015, underlining continued wastage of public funds despite the Jubilee government’s efforts to control expenditure.

A damning audit report seen by the Business Daily shows that the senior staff pocketed the money after making a total of 421 local and overseas trips to attend conferences, training workshops and field visits.
In most instances, beneficiaries did not state the reason for travel or account for the funds, leading the auditors to conclude that the trips were not necessary.
“Most approval records did not provide all the information required, such as justification of the trip, role of nominated staff, and amount of trips already taken by nominated staff,” says the report.
The CA had 189 people on its payroll during the period under review, meaning each of the executives who make less than half of the total pocketed between Sh1m and Sh6 million as per diem.
Besides exposing the gravy train that the authority has become for the senior executives, the audit report offers rare insight into the skewed remuneration structure that has left those in core public service earning as low as Sh10,000 a month while their counterparts in agencies like the CA earn private sector salary scales or even better.
Senior managers went on a travelling spree in pursuit of allowances, the report says, culminating to some officials staying out of their workplace for a total of seven months.
The report is the product of a comprehensive forensic that the CA board ordered in January to look into the agency’s operations, including travel expenditure after reports of wanton spending by senior managers leaked to the media.
The auditors found that the CA spent Sh404.1 million on staff travel comprising per diem, air tickets, training fees and registration fees.
“These tax-free allowances were observed in earlier audit findings to be an incentive for future increase in the number travelling and indeed amounts of per diem have increased,” the report, which the agency’s audit committee adopted on September 9, 2015, says.
The audit found that uncontrolled travelling by senior executives had culminated to overspending of the travel budget, leading to a negative budget variance and the danger of not fulfilling important obligations for lack of funds.
The auditors found that the senior executives submitted documents for only 34 out of the 421 trips made contrary to the CA’s requirements that a report be submitted at the end of every travel.
The exposé on senior executives travel allowances comes nine months after a leaked internal report showed board members pocketed Sh11.9 million in sitting allowances in the five months to November last year and were yet to account for Sh8.2 million paid to them as imprest.
The CA is Kenya’s richest State corporation having earned Sh7.3 billion from fees and taxes paid by agencies it regulates for the year ended June 2013.
The agency, which regulates the lucrative telecoms and broadcasting industries, collects frequency management fees, annual operating licence fees, type approval fees, interest income and other levies.

The telecoms regulator paid the Treasury Sh4 billion in dividends last year.
The wanton spending once again highlights the culture of impunity that is common in Kenya’s State-owned entities that are led by political appointees, have a bloated workforce, and engage in wanton spending on salaries and allowances.
Francis Wangusi, the CA director-general, for instance, earned a total of Sh6.1 million in per diem in the year to June 2015, topping the list of managers who made a fortune out of travel allowances.
The report shows that Mr Wangusi made 16 trips and was away from office for 105 days of the year.
Peris Nkonge, the authority’s director of finance and accounting, was second in the pecking order having pocketed Sh5.7 million in travel allowances from nine trips.
“Local per diem rates have been enhanced and if left unchecked, the number of travel and allowances are getting out of control,” the auditors warned.
The CA pays its executives an average of Sh10,675 per day in per diems for local travel while foreign travel is paid at between $400 (Sh41,700) and $1,000 (Sh104,200) per day depending on the city and country visited.
The list of top travel allowance beneficiaries includes Matano Ndaro, the director of competition affairs, who pocketed Sh5.6 million followed by Martin Ngesa, the assistant director in charge of postal licensing and compliance (Sh5.4 million), Rachel Alwala, the assistant director, e-commerce (Sh4.8 million), and Gababo Wako (Sh4.7 million).
Other senior managers who strained the CA’s budget with hefty per diem earnings are Michael Katundu, the director of information, who received Sh4.5 million, Tom Olwero, assistant director, frequency spectrum management (Sh4.47 million), Mohamed Haji, the assistant manager, frequency planning (Sh4.41 million) and John Omo, the authority’s secretary (Sh4.40 million).
Rose Nduku, an enforcement officer at the CA, logged a total of 219 days out of office and earned Sh2 million in per diem. The audit did not measure the full impact that prolonged absence of the executives had on operational efficiency, effectiveness and achievement of targets.
Switzerland topped the list of favourite destinations for the CA executives followed by London, Tanzania, Uganda and South Africa, according to the audit findings.
In most cases, the report says, non-technical staff travelled to attend technical events such as meetings of the Geneva-based International Telecommunication Union, Bern-based Universal Postal Union and Arusha-headquartered Pan African Postal Union.
“There were cases where travel was not in line with the official departmental mandate,” says the report.
But the CA management argued that attendance to these global meetings was key to Kenya’s visibility and was a determinant in getting elective positions at the organisations.

The report challenges the authority to leverage use of technology such as teleconferencing and videoconferencing to cut travel costs even as it advices the agency to cap its delegations to meetings.

The Sh307.2 million blown up in travelling allowances is enough to pay more than 1,500 P1 primary school teachers, who earn about Sh16,692 per month, for a year.
The funds would also benefit about 153,600 poor households with persons with severe disability, the elderly, orphans and vulnerable children who receive a monthly stipend of Sh2,000 under the State-funded safety net programme dubbed Inua Jamii.

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