In recent years, there have been a number of media reports about procurement malpractice and misuse of public funds by public officers entrusted with such duties. The reports tend to elicit a lot of public indignation and debate has often centered around who should be held accountable. On its part, the Government will argue that the institutions set up to deal with such malpractice are doing the best that they can. There are many examples of suspension or removal of implicated officials (including top officers) from office, freezing of assets and hefty fines, among others. However, this is unlikely to appease a public which is craving high profile convictions, the main complaint being that only the ‘small fish’ get netted for procurement crimes, with many of the more senior public officers seemingly walking away scot-free, or at worst, with a slap on the wrist.
So then, where should the buck stop when public funds are misappropriated through irregular procurements? Faced with this question, the High Court of Kenya made an illuminating decision on 28 February 2022, in the case of ‘Tom v Director of Public Prosecutions & 2 others; Kenya National Highways Authority & another (Interested parties).
In this case, the Kenya National Highways Authority (KENHA) approached the National Land Commission (NLC) to compulsorily acquire land for construction of road networks in Mombasa. NLC, with the help of its surveyors and planners, went ahead to identify and acquire the land. In an interesting turn of events however, the petitioner – who was the Chief Executive Officer of NLC, was subsequently arrested and charged by the Ethics and Anti-Corruption Commission (EACC) for various offences arising from the payments made by the NLC in connection with the land.
In his defense, the petitioner argued that his role in the entire procurement exercise was merely administrative – to implement the decision of NLC’s Land Acquisition and Compensation Committee, which had approved and authorized all the payments made to those impacted by the project. The petitioner argued that all the technical decisions of NLC had to be made through committees, thus reducing him to “a glorified clerk”, seeing as he did not have voting powers and could not influence any of the decisions of a committee.
The Court strongly disagreed with the petitioner’s contention, holding that as CEO and accounting officer of the NLC, he could not hide behind decisions of a committee as this would be tantamount to ceding his statutory functions to a third party. Moreso, on account of the provisions of the Public Finance Management Act (PFMA), which squarely place the burden of managing the finances of a public entity on the accounting officer, requiring all accounting officers to ensure that resources in their docket are used in a manner that is lawful, authorized, effective, efficient, economical and transparent.
Given the level of accountability expected of the role, it is important to understand who qualifies as an accounting officer. Accounting officers for national government entities such as ministries, departments and agencies, are designated by the Cabinet Secretary, National Treasury, except where they are expressly appointed under the relevant legislation. In the case of state corporations, their Chief Executive Officers are deemed to be the accounting officers (except where specifically designated under law) while Principal Secretaries are the designated accounting officers for their respective state departments. At the County level, accounting officers for county government entities are persons designated as such by the County Executive Committee Member in charge of Finance. Ordinarily, Chief Officers, by virtue of their offices as administrative heads, become the accounting officers of their respective County departments.
Accounting officers for national government entities are accountable to the National Assembly for the management of resources of their respective national government entities, while those for County public entities are accountable to the County Assembly.
What then, should be the expectations of the accounting officer in the context of public procurement and asset disposal?
One of the key takeaways from the High Court’s decision in the case cited above, is that accounting officers must take a proactive approach towards ensuring the propriety of all public procurement and asset disposal carried out within their dockets. They cannot be passive observers. While they can set up tender committees, evaluation committees and such other committees as may be necessary to help them discharge this function, they should always remember that the buck stops with them. This should hopefully be the motivation for accounting officers to go the extra mile in ensuring that all dealings within their docket are professional and above board.
The law does offer some respite to accounting officers for acts (or omissions) committed in good faith in the course of their duties. However, for those who are found guilty of committing an offence, the law prescribes punishment of a fine, conviction or both.
This is not to say that other cadres of public officers who engage in procurement malpractices cannot be held liable. The law requires all public officers to adhere to the national values and principles of good governance, integrity, transparency and accountability in the conduct of their duties. It therefore follows that every single person along the procurement chain, can be brought to book.
In its decision above, the High court epitomized the famous Chinese proverb that a fish rots from the head down. Top management of public entities cannot escape blame when it comes to procurement malpractices. Looked at positively, this decision should embolden Accounting Officers to take such steps as they deem necessary to streamline procurement within their dockets, seeing as they have the full backing of the courts. They must not act or be seen to act as glorified clerks, but rather, take their rightful position as lead actors in procurement and preservation of public assets for future generations.
The article was published in the Business Daily and can be accessed here.