Auditor flags Sh1.8 billion KLB printing deal over procurement gaps

A Sh1.8 billion outsourcing deal at the Kenya Literature Bureau has come under sharp scrutiny after the Auditor-General flagged gaps in procurement records and warned that the expenditure may not have delivered value, raising fresh questions over how the State publisher handled the contract.

An audit for the financial year ended June 30, 2025, shows that the Bureau entered into outsourced printing arrangements without key supporting documents required under procurement rules. Auditor-General Nancy Gathangu pointed to missing evidence, such as market survey reports, which are meant to justify outsourcing decisions and guide cost evaluation.

Under the Public Procurement and Asset Disposal Regulations, user departments are expected to submit requests backed by feasibility studies, surveys and relevant documentation before any outsourcing is approved. However, auditors noted that the Bureau did not provide such records, leaving unclear the basis upon which the printing services were contracted out.

The report also highlights concerns over transparency in the contracting process. The agency did not submit a complete list of outsourced contracts and their costs, making it difficult to establish the full scope of the agreements and assess whether public funds were properly used.

“In the circumstances, value for money may not have been realised on Sh1.8 billion spent on contracts with customers,” the Auditor noted in the report.

Procurement continues to draw close attention in public institutions due to risks of weak compliance and misuse of funds, with oversight bodies maintaining pressure on State agencies to tighten controls.

The audit findings come at a time when the Kenya Literature Bureau is facing declining financial performance. Its latest statements show a sharp fall in revenue, reflecting reduced demand for its publications.

Gross turnover dropped to Sh1.83 billion from Sh3.41 billion in the previous year, marking a 46.4 percent decline. The drop in sales volumes directly affected earnings, with net profit before tax falling to Sh30.01 million from Sh154.5 million, an 81.8 percent decrease.

The reduced profitability also led to lower returns to the National Treasury, with the proposed dividend declining to Sh1.22 million from Sh13.1 million in the prior year.