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Daily Nation : February 20th 2014
34 | BUSINESS Accountants raise red flag on spending of public finances Speedy change of purchase law demanded to include measures that will guard against misuse of cash allocations BY LILIAN OCHIENG firstname.lastname@example.org law to include punitive measures for non-compliance as a way of safeguarding public funds. During their annual sympo- A sium, the group said there is increased abuse of Public Procurement and Disposal Act 2005 by both the national and county governments. According to the Institute of Certified Public Accountants of Kenya (Icpak) chairperson, Mr Benson Okundi, most procurement procedures are against article 227(1) of the Constitution that requires organs to procure in a fair, equitable, transparent, competitive and cost effective manner. “NSSF and the standard gauge railway are cases in point where the law has been flouted costing Kenyans billions of shillings,” said Mr Okundi. “The misappropriations in public funds stand in the way of the Vision 2030 goal of achieving 10 per cent projected growth rate,” he noted. LILIAN OCHIENG | NATION Institute of Certified Public Accountants council members from left, Ms Rosemary Gituma vice chair, Mr Benson Okundi chairperson and council member, Mr Rashid Mohamed and Mr Julius Mwato at yesterday’s meeting. Icpak pointed out that the act has been ineffective since there are current public procurement processes that are flawed; procedure for tendering the Sh1.2 trillion Mombasa-Malaba standard gauge railway projects and the Sh24 billion laptop project do not meet constitutional provisions. Mr Okundi said it was shocking to note that the standard gauge railway contract to a Chinese firm was a government-to-government deal that is not subject to the Public Procurement and Disposal Act. Stiff penalties “This is an encouragement to We call for prudence in public finance management to save our economy,” Icpak council member Rashid Mohammed misuse of tax payers’ money; the Act should make provisions for all government procedures that involve the public to be highly scrutinised,” Mr Okundi said. The institute wants the Act amended to include stiff penalties that will lead to strict adherence to procurement rules and regulations. This would save the country from inquiries such as the ongoing one on the standard-gauge railway. “It is important to put in place instruments for systematically assessing the performance of procuring departments,” the Ic[ak chairman said a press briefing yesterday. “The Act must put in place regulations for constant public ABOUT LAW What the Act provides The Act aims at establishing procedures for efficient public procurement and for the disposal of unserviceable, obsolete or surplus stores, assets and equipment by public entities and to provide for other related matters procurement audit and inspection,” he said. According to Icpak council member Rashid Mohamed, stretching resources towards maintenance and development of new structures will no doubt slow down Kenya’s development rate. “We call for prudence in public finance management; to save our economy in the midst of exposure to external shocks,” Mr Mohamed said. “Uncertain global trends, fragile political situation in the sub-Saharan region, oil price increases and the blow from recession in the European Union coupled with our mismanagement of funds is a great setback to the economy,” he noted. Since the Auditor-General and Controller of Budget have reported widespread misallocation of public funds, the accountants want the Act to make provisions for only qualified and certified public financial managers to handle public procurement processes. Britam owners give nod to takeover deal BY NATION REPORTER Britam shareholders have approved a deal that will award Real Insurance owners Sh1.3 billion and considerable stake at the financial services group. During an extra-ordinary general meeting held yesterday at the Kenyatta International Convention Centre, in Nairobi, Britam owners gave their nod to the move to buy the insurer in a cash and share swap deal that will give it an opportunity to expand on the continent. Real ’s primary shareholder is Mr Samson Kamau, who is also the company’s chairman. The other investors include Mr Joe Muchekehu, Mr Edward Njoroge, Mr Ian Mukuria, Mr Morris Wahome and Ms Constance Gakonyo. Britam will pay Sh825 million in cash and issue new shares each worth not less than Sh11 to the Real’s shareholders in exchange of 99 per cent ownership of the firm. The Britam management is, however, in dilemma on whether to rebrand the company with its identity after the buyout. “We will make a decision by consulting other partners but we wouldn’t expect in long run to manage two separate companies,” the firm’s managing director, Mr Benson Wairegi (right) said at a press conference after the extra-ordinary general meeting. ccountants have called for speedy amendments to the public procurement DAILY NATION Thursday February 20, 2014 GOING PUBLIC Five more companies to list on the Nairobi Securities Exchange small firms segment. Page 38 LEGISLATION | Symposium rails against increased abuse of the Act by national and county governments BRIEFLY Two taps on screen to switch off LG phones New LG mobile phone can be switched on or off by tapping twice on the screen. The feature, known as KnockON, was introduced through the LG G2 handset. It will be available on L Series II handsets. LG first introduced the feature on the G2 as alternative to rear-facing power button. The function later graduated to G Pas 8.3 tablet and the G Flex smartphone. Existing owners will access the tool through downloading while future users will find it pre-installed. ICT Strathmore students develop Samsung apps Samsung Electronics East Africa has unveiled six Android apps developed locally by Strathmore IT students in partnership with the university. The apps will be available on the Samsung app store in a week’s time. The apps are on entertainment, education, games, lifestyle, travel and productivity, but their names were not disclosed. Speaking at the launch, Samsung East Africa chief operating officer Robert Ngeru aksed developers to find solutions that have a global market appeal. Samsung works with Strathmore’s iLab Africa to train students on applications. SURVEY Kenya leading in mobile cash use Kenya ranks first among 24 227 The article in the Constitution whose Clause 1 is being violated developing countries in the share of residents who make or receive payments through mobile phones, a US research centre reported on Tuesday. A majority of Kenyans (56 per cent) use M-Pesa and other mobile moneytransfer services, according to a global survey conducted last year by the Washington-based Pew Research Centre. None of the 23 other nations surveyed came close to Kenya’s position in “the forefront of a banking revolution,” Pew associate Jacob Poushter said.
February 19th 2014
February 21st 2014