Chief Justice David Maraga is struggling with debts just as President Uhuru Kenyatta.
The Judiciary is running on basically a flat-tire. Now everyone is on CJ Maraga’s neck.
The Judiciary is staring at a lose of more than Sh216.5 million to contractors who secured performance bonds from the troubled Chase Bank and its subsidiary, Rafiki Micro Finance Bank.
In a report, Auditor-General Edward Ouko says a total of 13 performance bonds submitted by contractors had expired and were yet to be renewed as at June 30 2018, the audit date.
“In addition, 10 bonds valued at Sh216,491,929 that were availed for audit review were issued by Chase Bank (under receivership) and its subsidiary, Rafiki Micro Finance Bank, and their validity is therefore doubtful,” Mr Ouko says in an audit of financial statements of the Judiciary projects for the year ended June 30, 2018.
The report, however, comes months after the troubled Chase Bank was taken over by Mauritius State lender, SMB Holdings, in August 2018. SMB took up some assets and liabilities as well as several branches of Chase Bank, which was put under receivership in a transaction sanctioned by the Central bank of Kenya.
Mr Ouko says the terms and conditions of the contracts for construction of 28 law courts required each contractor to submit a performance bond to secure the employer (Judiciary) in case of failure to implement the projects as provided in the signed contract agreements.
“However, a review of the project records revealed that a total of 13 performance bonds submitted by the contractors had expired and were yet to be renewed,” Mr Ouko says in a qualified audit opinion.
Mr Ouko said as at the time of audit, a total of Sh2.3 billion had been paid to contractors against performance bonds of Sh216,491,929.
Contractors took performance guarantees from Chase Bank to construct or refurbish courts in Chuka, Muhoroni, Oyugis, Nyamira, Makindu, Makueni and Mombasa.