- Inconsistencies in majority of the 47 county governments' records made it difficult to confirm the accuracy and completeness of the expenditures.
- Some counties did not present some documents for audit verification contrary to the law, auditor says.
Taxpayers risk losing billions of shillings in the counties due to the huge variations recorded between the Integrated Financial Management and Information System (Ifmis) and statements of their financial transactions.
In the 2016 county audit reports, Auditor-General Edward Ouko noted that the inconsistencies in majority of the 47 county governments' records made it difficult to confirm the accuracy and completeness of the expenditures.
“Documents were not presented for audit verification contrary to the law,” Mr Ouko said in the reports tabled in the Senate.
The Public Procurement and Disposal Act requires the county accounting officer to maintain a filing system with clear links between procurement and expenditure files to facilitate an audit trail.
Government institutions are required to carry out manual transactions and update the Ifmis accordingly, but this has not been the case as expenditures in the counties have always been done manually under the guise that the “system is slow or not working.”
For instance, the Lamu County Government had discrepancies amounting to Sh5 billion in financial statements and Ifmis.
The county also failed to prepare Ifmis bank reconciliation statements.
“The management did not prepare bank reconciliation statements for all the bank accounts under the Ifmis system as required by the National Treasury and the Public Sector Accounting Standards Board,” the auditor said of Lamu County Government.
“Instead, bank reconciliations were prepared from balances recorded in the manual cash books, which did not capture all the payment transactions in both recurrent and development vote.”
Baringo, Kajiado, Nandi, Narok, Siaya and Tharaka-Nithi counties were also cited among those that recorded discrepancies.
Mr Jerome Ochieng’, the director of Ifmis, said using the financial system should be made mandatory at the national and county level before any transaction is approved and made.