JSC Statement - CRJ Admitted 35 Allegations

7/27/2019 JSC Statement - CRJ Admitted 35 Allegations

http://slidepdf.com/reader/full/jsc-statement-crj-admitted-35-allegations 1/9

1 | P a g e

REPUBLIC OF KENYA

THE JUDICIARY

HIGHLIGHTS OF FINDINGS OF THE JUDICIAL SERVIVE COMMISSION ON

INVESTIGATIONS ON THE CHIEF REGISTRAR OF THE JUDICIARY

On September 9, 2013, the Judicial Service Commission served the Chief Registrar

of the Judiciary, Mrs Gladys Boss Shollei, with 87 allegations touching on financial

and human resource mismanagement, irregularities and illegalities in procurement,

and misbehaviour. In her responses, filed on October 1, 2013 and subsequently

amended on October 15, Mrs Shollei admitted 33 allegations and denied 38 others.

Responses to the other 16 allegations balance were equivocal and qualified.

The financial outlay in the allegations against Mrs Shollei stands at

Ksh2,207,400,000: Those she admitted are estimated to be valued at

Ksh1,696,000,000 while those she denied stands at a value of Ksh250,400,000 and

Ksh361,000,000 where there are mixed responses.

The following are the highlights of the JSC’s findings after investigations. The full

report is on the judiciary website, www.judiciary.go.ke

1. Leasing of Elgon Place

The Commission was concerned about whether there was a valid contract to

warrant the payment of hundreds of millions of shillings to lease the Elgon Place

premises.

http://www.judiciary.go.ke/






2 | P a g e

An Internal Audit Report shows that Sealink Holdings, the proprietors

of Elgon Place, was paid by the Judiciary Headquarters Ksh42,066,988.60

(USD 371,259.85 at Central Bank of Kenya exchange rate of approximatelyKsh.87.60) and Ksh.9,539,687.70 being rental fees for three (3) months.

At the same time, the Judiciary, through the Judiciary Training Institute, paid

Sealink Holdings Ksh43,250,082.10 at KCB exchange rate of approximately

Ksh.90.80, thus occasioning additional costs of Ksh.1,183,093.50 as foreign

exchange expenses. Payment in foreign currency is against government

financial regulations unless authority is obtained from Treasury. The CRJ did

not provide sufficient justification and evidence of authority from Treasury to

make the payments to Sealink in foreign currency in line with government

financial regulations.

Payments were made of security deposits contrary to Government

Financial Regulations amounting to USD 171,880.20 (Ksh2,873,400/=). The

payment of security deposit was a pre-payment that contravenes Section

5.4.1 of the Government Financial Regulations.

Payment of service charge of Ksh3,333,144/= was done even when

the Judiciary was the sole tenant and the landlord was not providing services.

The CRJ admitted in her response that Sealink Holdings was paid double rent

from the Judiciary Headquarters and the JTI. The CRJ explained that the

double payment was immediately detected and the amount was set off



3 | P a g e

against future Certificates of Participation/Fit outs. The Commission was

concerned by this response, given that there were no documents availed by

the CRJ to confirm that indeed the set off was effected as stated. Secondly, the

Commission was concerned by this response given that the set off was beingdone against future certificates for partitioning fit-outs without any

indication of the approximate cost of the works.

It was alleged that CRJ had authorized payments totaling

Kshs169,051,914 to be made on account of the premises said to be on

account of rents for January to June 2013, contrary to the terms of the lease

agreement and way in excess of the agreed rent. She admitted the allegation

and stated that the total sum paid to Sealink Holdings was

Ksh.195,147,519.90 -- a sum higher than what was stated in the

allegations. The CRJ stated that this sum was inclusive of rent, service charge,

security deposit and fit-outs. The Commission observed from the lease

agreement that the effective date for payment of rent for Elgon Place

premises was April 1, 2013, and not January. However, the Judiciary paid rent

to Sealink Holdings for the period of January 2013 to June 2013, and again for

the period of July 2013 to September 2013. These payments were clearly

outside the terms of the lease agreement and way in excess of the agreed rent.

Subsequently, the CRJ caused “advance interim” payments totaling

Ksh177,955,376.85 to be made in four installments on account of the

premises for partitioning works, thereby pre-financing the said contractor.The Commission was concerned that the CRJ did not avail the actual contract

document signed by the Judiciary and the contractor to confirm the specific

terms of the contract. Section 5.1 of Government regulations states clearly



4 | P a g e

that Government accounting prohibits prepayments or pre-financing.

The CRJ admitted that the partitioning works for the Elgon Place premises

was obtained through direct procurement. The Commission observed that onMay 23, 2013 the JSC Finance Committee raised queries about the

procurement procedure used for partitioning works at ELGON PLACE

PREMISES. Similarly, on May 15, 2013, the Finance and Administrative

Committee had raised the same queries on procurement. Earlier, on January

23, 2013, the JSC Finance and Administration Committee gave directions to

the effect that Management must report to the Committee on the second

phase of implementation on Elgon Place premises to ensure prudent

utilization of public funds. The Committee had concerns on whether S.29 and

74 of the Public Procurement & Disposal Act 2006 were complied with when

the decision to award MS SENTRIM the partitioning works was made.

The Chief Registrar denied allegations of leasing ELGON PLACE for the Judiciary

without valuations based on the available market rent rates. The documents she

presented in her defence were neither dated nor signed and its author was

unknown. The Commission could not establish that due diligence was done to

ensure that the Judiciary gets value for money. There are two lease documents for

the property, each witnessed by a different person – who had no legal capacity to

witness and bind the Judiciary in an agreement such as a lease.

The lease was not signed by any of the directors of the private company offering thepremises for leasing, contrary to the law. The documents were also not sealed. The

lease terms were amended from six years to 10 years without a proper explanation,

and the lease was not registered to safeguard the interests of the Judiciary. No



5 | P a g e

evidence was provided to confirm that the documents in question were lodged at

the Lands Office for registration as proof that the registration was ongoing.

Government Financial Regulations provide that all procurement of goods and

services exceeding Ksh50,000 must be through written contract agreement and nopayment should be made without a valid contract.

Although the CRJ claims that she “duly informed the JSC which confirmed the

process on January 15, 2013”, with regard to leasing Elgon Place, the Commission

noted from its records that on January 15, 2013, the JSC Committee appointed a

Committee to inquire into complaints against Hon. Mutava J, had a hearing session

and the Hansard report shows that there were no deliberations on Elgon Place

premises.

2. Pre-financing contractors

The CRJ admitted that she paid Ksh58,041,487 to Lekha Trading Company Limited

on the strength of a bank guarantee. She pre-financed the company for the supply,

delivery, installation and commissioning of EPABX cabling at the Supreme Court

even before the works commenced.

The Commission interrogated the bank guarantee and noted that it was not duly

sealed or witnessed. The CRJ produced a document in an attempt to prove the

authenticity and validity of the said bank guarantee. This document is, however, not

dated, neither is it signed and the author is unknown. The email attached to thesame document is equally not dated and neither does it authenticate the bank

guarantee. The Commission observed that Lekha Trading Company according was

paid the full contractual sum against a pro-forma invoice contrary to Section 5.4.1



6 | P a g e

and 14.7 of the Government Financial Regulations. The payments were clearly

not made against any certificate of works.

The CRJ admitted that to date, the works have not been handed over to the Judiciaryyet the bank guarantee upon which the payment of Ksh58,041,487.00 was made

expired on June 25, 2013. That in the event that the Judiciary opts to seek redress,

it would be exposed to risk since there is no evidence to show how the contract was

to run. CRJ annexed a letter from Equity Bank confirming the authenticity of the

bank guarantee, but the guarantee has expired. An internal memo from the Director

of ICT shows that the items supplied did not meet contract specifications and the

judiciary was supplied refurbished or stolen items.

In breach of the law and Government Financial Regulations, the CRJ pre-financed the

installation of LAN/WAN services countrywide by causing advance payments of 30

per cent of the total costs to be made to the said providers. She admitted the

allegation, which the Commission noted clearly violates the provisions of Section

14.7 and 5.4.1 of the Government Financial Regulations. The law requires that

progress payments for contractors be paid against a certificate of works.

She admitted authorising an irregular payment of Ksh26,470,332.00 as advance

first interim payment on account of proposed prefabricated premises for Bomet,

Marimanti, Othaya and Wang’uru Courts. The Commission observed that the bank

guarantee in respect of this payment was not made available for perusal. The pre-

payment/pre-financing to JKUAT Enterprises Ltd on account of proposedprefabricated premises for Bomet, Marimanti, Othaya and Wanguru Courts was

made contrary to Section 14.7 and 5.4.1 of the Government Financial

Regulations. It was noted that special conditions in a contract agreement cannot



7 | P a g e

override written law.

CRJ admitted authorizing an irregular payment for PREFABRICATED COURT

HOUSES in the sum of Ksh82,737,000.00 to JKUAT Enterprises Ltd for interimarchitectural consultancy without any interim certificate of works being provided.

The Commission observed that the CRJ’s response to the effect that interim payment

certificates are normally used while paying contractors and not consultants was not

true because JKUAT were supervising consultants and they could only be paid

against the certificates submitted by the contractors, this is in line with the

provisions of Section 14.7 of Government Financial Regulations . The CRJ did not

make available the contract signed with JKUAT Enterprises Ltd for consultancy

services to confirm the terms of the agreement.

3. Personal integrity

The CRJ denied the allegation that she irregularly received sitting allowances

amounting to Ksh2,560,000.00 when the JSC was conducting interviews for Court

of Appeal Judges and High Court Judges when she did not participate in the said

interviews. The Commission referred to signed register and the verbatim reports for

High Court and Court of Appeal interviews for 2012 and 2013, which confirm that

the CRJ did not participate in the interviews. The Commission noted that the

question of integrity is personal and if there were any erroneous payments made,

they ought to have been refunded at the earliest opportunity.

Between October 31 and November 21, 2012, the CRJ irregularly caused herself to

receive payment totaling eight (8) months’ salary advance in the total sum of

Ksh3,539,250.00 from the Judiciary Milimani Court Deposit fund. The CRJ



8 | P a g e

admitted the allegation and stated that the facility was also available to other

Judges. She presented a list of the Judges with salary advance which she approved.

In her response, the CRJ stated that she had repaid a substantial amount and still

continued to make payments. The Commission observed that there was no evidenceof such repayment save for a receipt of Ksh680,625.00. The Commission noted that

taking salary advances from the Judiciary Fund as opposed to the Consolidated Fund

Services, which was the CRJ’s pay-point, contravened Section 5.8.3 and 5.8.2. of

the Government Financial Regulations which state that a salary advance must be

obtained within the Vote which bears the cost of the officer’s salary and in this case

CRJ’s salary point is the Consolidated Fund Services. The Regulations also state that

salary advances should not be for more than two months and should only be

granted when an officer has no other outstanding advances. Further, advances can

only be paid in very exceptional circumstances. The Regulations also state that

collateral security is required when the advance exceeds two months. The

Commission observed that the circumstances called for the salary advance may not

have been exceptional, and that further, the advance was also self-approved.

The Commission received no evidence on repayment of the salary advance. Save for

the receipt of Ksh680,625.00 CRJ did not repay the salary advances as and when

provided in the Government Financial Regulations. The pay slips referred to by CRJ

in her response were missing from the documentation presented to the

Commission.

The Commission noted that salary advance is generally made out of cash availablefor other services. The overall effect of such advances is to cause liquidity problems

in the Judiciary.



9 | P a g e

4. Misbehaviour

The CRJ admitted the allegation of misbehaviour, which had stated that on August 19, 2013 she addressed the media and publicly referred to the Commission’s

resolution among others as, “irresponsible” thereby exhibiting open contempt for

the Commission. She stated she had a right to administrative action. The CRJ

response confirms the allegation that she prefers to employ temporary and casual

staff instead of advising the JSC to employ the necessary staff to support core

judicial functions.

The CRJ admitted to issuing Government vehicles to junior officers in her office,

paying them special perks and giving them titles without the authority of the JSC.

The regulations (JSSR) the CRJ alludes to support her actions are not applicable in

the Judicial Service.

The appointments were made without reference to JSC thus the CRJ action

contravene Articles 172(1)(c) and (2), 232 and Part III Third Schedule of the Judicial

Service Act, 2011 and the JSC policy of “equal opportunity and selection of

candidates on merit through fair and open competition from the widest range of

eligible candidat es”.

JSC Statement - CRJ Admitted 35 Allegations

Documents

Transcript of JSC Statement - CRJ Admitted 35 Allegations