Hints of plunder as gaps emerge in county books

The Auditor-General has painted a bleak picture of accountability and transparency measures by counties in financial management.

In his latest report, Mr Edward Ouko says massive discrepancies were noted in the spending of public funds in several counties, pointing to a possibility of widespread plunder and misuse of taxpayers’ money.

For instance, in Laikipia, there was a variation of Sh9 billion between the Integrated Financial Management Integrated Systems (Ifmis) and the county’s financial statements.

CAR LOANS

The county also failed to remit Sh48.7 million in statutory deductions from staff salaries to Local Authorities Provident Fund and Local Authorities Pension Trust.

The auditor also described Murang’a and Nyeri statements as “wrong and misleading”.

In Nyeri, major discrepancies between the Ifmis figures and the financial statements amounted to a whopping Sh5 billion.

The auditor also found that two county executives had defaulted on repaying car loans and house mortgages amounting to Sh7.3 million.

“There was no evidence presented for audit indicating that the loans were secured with collateral or assets with the bank … hence the risk of loss of funds,” the Auditor-General noted.

The auditors also raised the alarm over the spending of Sh72 million for bursaries under the Elimu Fund programme after the county failed to produce receipts to support it.

GHOST PROJECT

Further, former governors of Nakuru and Nyandarua, according to the report, may have presided over the loss of millions of shillings in public funds in unsupported expenditure, ghost projects and faulty procurements.

In Nakuru, the government under then-Governor Kinuthia Mbugua paid Sh9.89 million to contract M/s Summer Winter Events Management to organise and conduct the 2016 Miss Tourism Pageant in 11 sub-counties.

However, there was no evidence of the events, whose finals were set for March 25 last year, having been held and several sub-county administrators were not aware of the event.

Nyandarua, under then-Governor Daniel Waithaka, paid Sh2.04 million to facilitate ward administrators for a governance course in Naivasha on November 6 to December 11, 2015.

However, no signed attendance list, work ticket or bus tickets were provided to prove the officers’ attendance.

REVENUE ARREARS

Also, County Assembly committees were irregularly paid Sh1.54 million as facilitation for report writing.

Mr Ouko also queried the acquisition of Sh1.1 billion assets and payment of Sh108 million to M/s Jimro Enterprises by the Kirinyaga county government for construction of the governor’s office after no vouchers were produced.

The auditors also found Sh290 million in revenue arrears.

The county was further faulted for implementing projects that had not been budgeted for yet they were not an emergency. Also, Sh14 million projects, mostly dispensaries, had stalled.

Nyamira, Kisumu and Vihiga county governments and Kakamega County Assembly also failed to account for use of millions of shillings.

Mr Ouko revealed that in Vihiga, 74 unknown projects valued at Sh408.4 million were among the 136 budgeted for in the 2015/16 financial year. The regional government abandoned six other projects valued at Sh12.8 million.

GRANTS

The county was also found to be indebted to contractors and suppliers to the tune of Sh1.2 billion.

Kisumu could not explain the presence of Sh168.7 million in the summary statement of appropriation in the financial year ending June 30, 2016.

The report said the management blamed the variance on the National Treasury retaining conditional grants.

Nyamira was unable to explain how it spent more than Sh34 million of its income during 2015/16 financial year while Ifmis figures did not agree with the county’s financial statement.

Further, the development budget and amount in the original Sh71.6 million budget was adjusted or cancelled out by a similar amount without explanation.

Kakamega County Assembly irregularly awarded a Sh499.5 million tender for construction of the chamber to M/s Neelcom Construction Services.

It did not involve the Ministry of Public Works in the preparation of the bill of quantities and the design and plan of the building while the project was not in the annual procurement plan and did not feature in the budget.

TARGETS

A scrutiny of the BQ revealed inconsistencies in some items.

In the North Rift, counties did not meet their revenue collection targets for the financial year 2015/16.

Baringo, with a Sh4.8 billion budget, for instance, collected Sh181,869,699 against a target of Sh300 million.

Several others did not provide documentation for trips by some officials. For instance, in Elgeyo-Marakwet, Sh11,775,290 out of Sh44,255,290 was not supported by documents.

In Nandi, Sh9,761,674 used in foreign travel cannot be explained.

EXPENDITURE

Mr Ouko has also poked holes into the county governments’ unsupported compensation of employees. Nandi, for instance, compensated staff Sh303,667,193, of which Sh173,333,371 had no supporting schedule.

Elsewhere, Sh204 million collected from Coast Provincial General Hospital by the Mombasa county government could not be accounted for, prompting the Auditor-General to report that unbanked revenue “may have been misappropriated or irregularly spent on unauthorised expenditure”.

Reads the report: “The management was, therefore, in breach of the laws. This is contrary to Article 2017 of the Constitution, which requires all county revenues to be banked intact in a revenue bank account.”

By Caroline Wafula, Eric Matara, Grace Gitau, Derick Luvega, Rushdie Oudia, Benson Amadala, Henry Nyarora, Ahmed Mohamed, Barnabas Bii, Wycliff Kipsang and Philip Bwayo