The National Treasury building in Nairobi. FILE PHOTO | NMG
The Treasury irregularly directed the Attorney General’s office
to source oil worth Sh143,844,069 from the National Oil Corporation
(NOC) despite having a valid contract with M/S RH Devani Limited, a
parliamentary committee heard Thursday.
Appearing
before the Public Accounts Committee (PAC) of the National Assembly,
Solicitor-General Ken Ogeto said the Treasury ignored a contract that
Devani Limited had with the Transport ministry to supply fuel to
government ministries, departments and agencies during the 2016/17
financial year.
“This is the dilemma
we had because there already existed a binding agreement with Devani for
the supply of oil. A breach of this contract could have cost the
government a huge sum of money,” Mr Ogeto told the committee chaired by
Ugunja MP Opiyo Wandayi.
The State
Law Office was at pains to explain why it failed to notify Treasury of
the contract and the potential legal redress and attendant costs had the
Devani contract been breached.
“Did
you notify the Treasury that you already had a valid contract with
Devani?” Mr Wandayi posed and asked for documentary proof.
The
Transport ministry provided a list of pre-qualified firms to supply the
commodity where the government agencies were required to pick one.
The Auditor-General’s report on the accounts
of the State Law Office for the financial year 2016/17 questions why it
ignored a government directive that all fuel be procured from NOC.
“During
the financial year, the ministry procured all fuel consumed from a
local petroleum dealer, contrary to the government directive. It is not
clear why government regulations were not followed,” the report reads.
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