Numerous problems with contracting, purchasing, and oversight were identified at the embassy, which employs 171 individuals, has a fleet of 36 vehicles, and enjoys an annual budget of more than $12.5 million, according to the May audit conducted by Global Affairs Canada’s (GAC) Office of the Chief Audit Executive and Special Investigations that was posted online July 31.
“The audit identified inconsistent application of established processes across programs, which weakens overall control effectiveness and oversight reliability,” the report reads.
Despite a “strong management foundation,” the audit identified a number of sole-source contracts that surpassed approved limits, split purchases broken into smaller transactions to keep them below spending limits that would have required a stricter approval process or competitive bidding, and “insufficient verification of goods and services, creating compliance and oversight risks.”
Missing Fuel
In addition, the audit found that some of the fuel that was purportedly purchased for use in embassy vehicles may not have been used for that purpose, noting low vehicle mileage and incomplete records kept of trips and fuel purchases.
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“Fuel efficiency analysis revealed unusually low mileage, raising concerns that some fuel purchased by the mission may not be used for its intended purpose,” the report notes.
Auditors also concluded there were cases where embassy funds were spent before mandatory approval had been granted, including buying gas for embassy vehicles.
“Such lapses weaken pre-commitment controls and increase the risk of unauthorized or unnecessary spending,” the report states.
Specifically, the report found that approximately 85 percent of fuel for embassy vehicles was bought through a United Nations fuel source with secure oversight, but fuel purchased at other locations had weaker oversight.
The audit states that stricter controls and record-keeping have been put in place regarding fuel purchase at the embassy, and GAC has given the green light to implementing a digital system for managing the embassy vehicle fleet that it says will give better monitoring of vehicle usage and fuel consumption.
Further Concerns
Further cases identified include officials who the auditor said approved work done for the embassy that hadn’t been completed up to the requirements of the contract or that didn’t match the description of the work detailed in invoices.
This shortcoming left the mission exposed to “overpayment, inaccurate charges, and potential financial loss,” according to the report.
In addition, the audit found that overtime costs for staff hired locally had “regularly” gone over the limit set for this of 5 percent of total salary expenses.
The audit concluded that there are many particular risks and vulnerabilities to doing business in Kenya.
“The procurement and vendor landscape remains challenging, with risks linked to corruption, inconsistent vendor reliability and uneven regulatory enforcement, necessitating due diligence and continuous vendor oversight,” it noted.
In spite of the problems it identified in Nairobi, the May audit said the mission has made progress since its last audit.
“The mission has made meaningful progress since the 2016 audit and now has the fundamental structures, procedures, and tools needed to support sound management and oversight,” the report reads, noting that GAC’s four recommendations are currently being put into practice.
These include GAC’s instructions on improving the contract process, vehicle fleet oversight, ensuring that work done at the embassy is up to par and accurately described before contractors are paid, and modernizing the embassy emergency plan and more effectively training staff on what to do if there’s an emergency.
It also found significant lapses in budgetary and inventory oversight including missing items such as lawn mowers, tires, and kitchen appliances that had been purchased for the embassy and couldn’t be found.
Mission Issues
The audit’s findings regarding the Nairobi mission come in the wake of other problems identified with finances and contracting at several Canadian missions abroad.
The audit also said some purchases were split into smaller transactions, but did not say staff did this on purpose to dodge stricter oversight as it did state in the investigation of the split transactions at the embassy in Nairobi.
The review of the Dakar mission came in the wake of GAC firing 17 local employees at the Canadian embassy in Haiti in 2017 after uncovering a fraud scheme that it said included inaccurately inflated bills, theft, and collusion with local suppliers between 2004 and 2016.
The criminal scheme led to roughly $1.7 million in financial losses over that 12-year period.
Past audits have also uncovered various inconsistencies and financial management issues at other Canadian embassies, including improperly recorded cash transactions in the Ivory Coast, missing paperwork in Mali, a $145,000 expenditure for a party pavilion in Addis Ababa, Ethiopia, that was recorded as routine maintenance, and a contractor identified as a house painter who received $542,000 for work at the Canadian embassy in Amman, Jordan.
