Taxpayers may have lost hundreds of millions of shillings feared to have gone down the drain in works by the Labour ministry which have since stalled.

A new audit has flagged works on the National Employment Promotion Centre, a research institute office complex for the occupational safety directorate, and at the national employment authority.

At the promotion centre, the works were abandoned after the contractor was paid Sh244 million of the contract sum of Sh442 million.

The project was awarded to a local contractor on May 15, 2015 and was for a duration of 78 weeks.

However, at the time of audit, the total amount of work certified and paid was Sh244,023,001.

“This implied that the project may have stalled,” Auditor General Nancy Gathungu said in her review of the Labour ministry’s books as of June 30, 2022.

She reported that a physical verification done in November 2022 revealed that the contractor had abandoned the site.

“In the circumstances, the value for money realised from the expenditure of Sh244,023,001 could not be confirmed,” the auditor said.

Works at the Research Institute Office Complex for the Directorate of Occupational Safety and Health Sciences have also stalled amid queries of irregular contract variation.

In the referenced case, a contractor was awarded the project on May 3, 2019 at Sh114 million and was to execute the works within 32 weeks.

At the time of the audit in September 2022, the total amount of work certified was about Sh96 million “implying the project may have stalled”.

On the variation, Gathungu has queried the circumstances under which the project cost was moved upwards by Sh26 million.

The variation, the auditor said, represented a change in the original contract sum by 23 per cent, contrary to the law.

Section 139(4)(b) of the Public Procurement and Asset Disposal Act, 2015, caps contract variation at 15 per cent.

“The management was in breach of the law,” the auditor said in the report tabled in Parliament.

As of September 2022, the works were at 87 per cent completion and had stalled as a result of non-payment of dues to contractors.

“In the circumstances, the value for money realised from the expenditure of Sh95,291,477 could not be confirmed,” the auditor said.

A similar case has been cited at the National Employment Authority where the value for money in a payment of Sh11 million made to a contractor is in doubt.

The project was awarded to a local contractor on June 3, 2019 at Sh14.6 million and was to be delivered within 24 weeks.

At the time of the audit, Sh11.2 million had been paid but no work was going on, implying the project had stalled.

Gathungu has raised concerns about the project after the department failed to provide documents to support the venture.

Project progress reports, minutes of final inspection, project handover minutes and certificates of practical completion were not provided for audit review.

The audito said that in the circumstances, the value for money realised from the expenditure of Sh11.2 million could not be confirmed.

Labour ministry was also found to lack an active audit committee contrary to the provisions of Section 73 (5) of the Public Finance Management Act, 2012.

The law requires every national government entity to establish an audit committee whose composition and functions are spelled in the attendant regulations.

“In the circumstances, the ministry did not benefit from the assurance and advisory services from the internal audit function as well as oversight from the audit committee,” Gathungu said.

The audit further revealed that several properties owned by the ministry were at the risk of loss owing to lack of a fixed assets register.

Gathungu said that a review of the balance revealed that the ministry’s land, ICT equipment and nine motor vehicles had not been valued.

This means that the resulting values were not included in the balance.

“Further, the fixed assets register provided was incomplete where some assets lacked corresponding values, dates of purchase and details of physical locations making it difficult to carry out verification.”

It was further noted that most assets had not been labelled for identification, control, traceability and ease of verification.

The auditor warned that the ministry was in possession of various parcels of land and motor vehicles whose ownership documents were not provided for review.