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Audit: Postal Corporation Of Kenya In Kshs. 255,198,413 Irregular Leasing Of Assets


PMG & CEO Mr.Dan Kagwe

The postal corporation of Kenya leased Kshs. 255,198,413 corporation’s assets irregularly, an audit report in our possession confirms. The 48-page report also exposes unimaginable dirt, ask Kenyans struggle to pay taxes, that a few individuals loot.

The DCI and EACC, despite having all evidence, as tipped by the editor of this site, have refused to arrest the PMG & CEO Mr.Dan Kagwe who is the architect of all this rot.

The audit report notes that the corporation did not follow the public procurement and asset disposal Act, 2015 when leasing exposing an institution run with impunity.

Contrary to the Act, the Corporation did not prepare a leasing plan for its excessive assets (Land) and therefore did not seek the approval of the Cabinet Secretary on all the assets leased during the period under review.


As stated in the Act the Corporation is supposed to set aside thirty percent of its leases for enterprises owned by women, youth, persons with disabilities and other disadvantaged groups. However, the audit notes, this was not followed in the leasing process during the period under audit

There was no appointment of leasing committee as stipulated in the Public procurement and asset disposal Act, 2015 hence no basis on all the assets leased

The audit also notes that the employee in charge of surplus assets (Facility Manager) is supposed to come up with a comprehensive schedule of all excess assets and bring the matter to the attention of the Leasing committee through the head of the procurement function for onward approval by the Board, however this was not the case instead the Facility Manager only notifies legal department at the contract level

The auditor noted that the technical report that was availed for audit cannot be relied upon as an expert report since it was undated, no letterhead of the origin and authorization.


The auditor then lists the 15 leases that were irregular.

The audit notes that, due to the lack of adherence to the procurement act, the Corporation has not formalized the lease agreements through registration with the Ministry of Lands. The interests of the Corporation is therefore not safeguarded especially in case of any dispute arising from the usage and transfer to third parties.

In some cases, occupancy of the asset was done before the formalization of the lease agreement or payment of the initial amount approved.

Leasing of assets without following the public procurement and disposal act leads to contravention of the law which may attract heavy penalties or even imprisonment. (CHAP.177 of the Act), notes the auditor.

The auditor notes that the corporation may not have realized the true value of the assets leased out due to lack of proper valuation report.

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