Taxpayers could have lost millions more due to flawed procurement processes at the Kenya National Bureau of Statistics (KNBS).
KNBS spent Sh38.9 million in procurement of short message service (SMS) at an alleged exorbitant rate.
The bureau spent Sh38.9 million in procuring 30 million SMSs during the 2019 national census.
The cost implies that the bureau procured a single SMS at more than Sh1, which is higher than the current market rate.
Members of Parliament questioned the exaggerated rates since buying in bulk would have resulted into discounted price.
The National Assembly’s Public Investment Committee (PIC) chairman Abdulswamad Nassir claimed the procurement could have been used as a conduit by certain individuals to siphon taxpayers’ money.
“Did you directly procure this from Safaricom? The rates are exorbitant,” said Nassir. “This means you spent more than Sh1 per SMS. I do bulk SMS at a rate much lower than Sh1.”
Committee vice-chairman Ahmed Ibrahim said the taxpayers could have saved if the services were procured at the normal rates.
KNBS director-general George Obudho said that the SMS were supplied by a firm and not procured directly from Safaricom.
The supplier had invoiced for 30 million SMSs for use through Safaricom, Airtel and Telkom networks but only Safaricom confirmed having had their network used to send 22,856,831 bulk SMSs.
Auditor General Nancy Gathungu flagged out the payment after KNBS failed to provide details of the number of SMSs sent.
“…with the balance of 7,143,169 SMS valued at Sh8,214,644 having not been confirmed as having been utilised. Airtel and Telkom networks did not confirm having had any SMS sent through their networks,” states the audit report.
KNBS payments for SMSs were 13 to 144 times more expensive.
Safaricom sells bulk SMSs for Sh0.1 per SMS when a customer buys a bundle of more than 10 million.
Kenya National Bureau of Statistics paid the company Sh30 million for 22.8 million SMSs, meaning it paid Sh1.34 per SMS.
This price is 13.4 times more expensive when KNBS would have spent as little as Sh2.286 million.
However, Airtel and Telkom did not provide records to show the number of SMSs sent through their platforms and the amounts charged, the Sh8.2 million reported spent on the remaining 7.1 million SMSs mean an average of Sh1.15 was spent per SMS.
On Airtel, this would be 143.7 times more expensive, judging by the company’s current daily SMS tariffs, and 23 times more expensive, calculated by its monthly subscription of Sh75 for 1,500 SMSs. It would be 28.7 times more expensive on Telkom, which sells daily SMS bundles at Sh10 for 250 SMSs.
An average of Airtel and Telkom charges shows KNBS could have spent at most Sh173,436 for the 7.1 million SMSs, revealing that in total, the exaggeration in prices by KNBS – by between 1,340 and 14,375 per cent judging by the current market rates – cost Kenyans over Sh36 million.
