The Energy and Petroleum Regulatory Authority (Epra) is facing serious questions after it paid more than Sh20 million for two vehicles that had not yet arrived in Kenya.

An audit report released by Auditor-General Nancy Gathungu has shown that Epra made full payments to CFAO Motors for a Toyota Fortuner and a Toyota Hiace while the vehicles were still being assembled in Japan, which goes against public procurement rules.

According to the audit covering the year up to June 2024, Epra awarded the contract to CFAO Motors at a total cost of Sh20.69 million.

Out of this amount, Sh13.57 million was paid for the Fortuner and the remaining balance for the Hiace.

The law clearly prohibits paying for goods before they have been delivered and officially accepted by the receiving authority.

“Management made full advance payments for the vehicles totalling to Sh20,694,911 before delivery contrary to section 146 of the Public Procurement and Asset Disposal Act, 2015, which provides that no works, goods or services contract shall be paid for before they are executed or delivered, and accepted by the accounting officer of a procuring entity or an officer authorised by him or her in writing, and that no advance payment shall be made before the contract is signed,” the Auditor-General’s report states.

Epra’s Director-General Daniel Kiptoo explained the decision to make the advance payments by saying the supplier’s policy demands full payment before the vehicles are allocated and registered.

“CFAO Motors Ltd, the vehicle supplier, requires full payment before allocation and registration of vehicles, as per their standard operating policy,” he said.

The audit also pointed out that Epra’s own documents showed letters acknowledging receipt of the vehicles in May and June 2024.

However, CFAO Motors had informed Epra earlier that the cars would not be delivered until later in the year, in September and November.

The inspection and acceptance committee certified that the vehicles had been received and matched the order specifications months before the vehicles actually arrived.

“As at the time of conclusion of the audit in December 2024, the two vehicles had not been delivered to the authority,” the report said.

Epra maintains that the vehicles were delivered on December 6 and December 14, 2024.

The Director-General added that the vehicles were inspected on January 17, 2025, but the Auditor-General found earlier inspection reports dated May and June 2024 certifying receipt, which contradicts the reported delivery dates.

This case raises questions about Epra’s compliance with procurement laws and proper record-keeping, as well as whether the payments and certifications followed required procedures.