Au­dit shows mas­sive plun­der of tax­pay­ers cash across coun­ties

Un­con­firmed ex­pen­di­tures, lack of doc­u­ments to prove money use re­vealed

Daily Nation (Kenya) - - NATIONAL NEWS - BY SI­LAS APOLLO sapollo@ke.na­tion­media.com

Assem­bly mem­bers across the re­gions were un­able to fully re­pay car loans and mort­gages

The lat­est re­port by the Au­di­tor-gen­eral has re­vealed mas­sive plun­der of pub­lic re­sources that could have other­wise been spent on devel­op­ment in coun­ties.

The re­port seen yes­ter­day by the Na­tion, for in­stance, re­veals how Ward Reps ir­reg­u­larly spent mil­lions of pub­lic funds on trips, al­lowances, leisure and con­struc­tions.

The com­mu­ni­ca­tion says the MCAS either used the funds for the pur­poses with which they were not in­tended, or failed to pro­vide sup­port­ing doc­u­ments of the ex­penses in­curred.

In the re­port for the 2015/16 fi­nan­cial year, some of the county assem­blies, like Nairobi for in­stance, also failed to bank rev­enues run­ning into mil­lions of shillings. The city county, says Mr Ouko, failed to bank Sh69.5 mil­lion it earned from rev­enues.

This is be­side fail­ure by the House to ac­count for Sh207 mil­lion it used in the pur­chase of goods and ser­vices.

The Assem­bly, Mr Ouko says, spent Sh510 mil­lion on goods and ser­vices, but ex­pen­di­ture amount­ing to Sh207 mil­lion was not sup­ported by de­tailed ledger record.

“In the cir­cum­stance, it was not pos­si­ble to con­firm the pro­pri­ety of the un­sup­ported ex­pen­di­ture of Sh207 mil­lion on use of goods and ser­vices,” says the au­di­tor.

In Ki­ambu County, MCAS were paid an ex­tra al­lowance of Sh1.2 mil­lion as per diem for a work­shop held in Naivasha.

Ac­cord­ing to Mr Ouko, the MCAS were paid Sh2.4 mil­lion for a two-day con­sul­ta­tive meet­ing, yet it was sched­uled to last for a day.

Records pre­sented for au­dit also in­di­cated that the assem­bly did not deduct and re­mit taxes as re­quired and hence penal­ties and in­ter­est amount­ing to Sh11.9 mil­lion ac­crued.

Fur­ther, there was im­pro­pri­ety in de­duc­tion of mem­bers mort­gage and car loans, as most de­duc­tions were made as cash from sit­ting al­lowances.

The MCAS fur­ther spent Sh176 mil­lion on do­mes­tic and in­ter­na­tional trips, as well as the pur­chase of hos­pi­tal­ity sup­plies and ser­vices.

“There was also a lack of pru­dence in use of pub­lic funds af­ter MCAS were paid a to­tal 17.1 mil­lion as al­lowances for meet­ings or­ga­nized with­out spe­cific agen­das for dis­cus­sion,” says Mr Ouko.

Records main­tained by the Machakos Assem­bly failed to ex­plain an ex­pen­di­ture of Sh119 mil­lion paid to staff as salaries.

Ac­cord­ing to the re­port, the an­nual ba­sic salaries for staff amount­ing to Sh154 mil­lion dif­fered with the in­te­grated pay­roll and per­son­nel data­base sys­tem to­tal an­nual ba­sic pay amount of Sh35 mil­lion by Sh119 mil­lion.

Fur­ther, 30 new em­ploy­ees in­tro­duced into the pay­roll on Septem­ber 1, 2015, were un­sup­ported with proof of re­cruit­ment and sub­se­quent place­ment.

“An­other vari­ance of Sh6 mil­lion was noted in the salaries for tem­po­rary em­ploy­ees. The Assem­bly’s ap­proved bud­get was Sh883 mil­lion against a to­tal ex­pen­di­ture of Sh822 mil­lion, re­sult­ing in an un­der­ex­pen­di­ture of Sh60 mil­lion or ap­prox­i­mately seven per cent of the ap­proved bud­get,” says the re­port.

In Makueni, there were ir­reg­u­lar con­struc­tion works of an of­fice block, wall pad­ding, sep­tic tank, and drainage sys­tem, park­ing bay and land­scap­ing, cafe­te­ria and kitchen, all to­talling to Sh27.5 mil­lion.

Mr Ouko says that sev­eral anom­alies were noted in re­la­tion to the ten­ders like poor con­struc­tion lead­ing to lack of value for money, lack of doc­u­men­tary ev­i­dence to sup­port pay­ments as well as non-com­pli­ance with ten­der agree­ments.

The assem­bly also paid Sh52 mil­lion to a law firm for le­gal ser­vices that were not of­fered. This amount, says the re­port, was in­clu­sive of Sh44 mil­lion paid for un­spec­i­fied and un­sup­ported is­sues.

At the Coast, bil­lions of shillings spent by six coun­ties in the re­gion for the year end­ing 2016 can­not be ac­cu­rately ac­counted for.

Mr Ouko cites in­ac­cu­ra­cies in fil­ing of fi­nan­cial records.

Mom­basa led with dis­crep­an­cies amount­ing to Sh7 bil­lion, fol­lowed by Lamu with Sh5 bil­lion, which con­tra­dicts IFMIS.

Kwale could not ex­plain Sh20 mil­lion as re­flected in its fund bal­ance for­warded to the au­di­tor.

For Kil­ifi, Sh25 mil­lion rec­on­cile with the state­ments of re­ceipt and pay­ments which sta­tus re­port for the same pe­riod in­di­cated that Sh4.56 mil­lion rep­re­sent­ing just 36 per cent had been re­paid while Sh8 mil­lion was out­stand­ing.

Ac­cord­ing to the au­di­tor, given the slow rate of re­cov­ery of the loans, the out­stand­ing amounts could only be amor­tized in 20 or more months from June 30, 2016, which was im­pos­si­ble.

The au­di­tor warned that the loans and mort­gages fund was likely to suf­fer losses af­ter the ex­piry of the term of the MCAS since the ad­min­is­tra­tor had not made ar­range­ments for com­plete re­cov­ery of the debts.

In Sam­buru, the out­stand­ing loan bal­ance owed by 27 MCAS as at June 30, 2016 was Sh61.9 mil­lion.

“Fur­ther, loans were granted in ab­sence of mort­gage pro­tec­tion and fire poli­cies is­sued by an in­sur­ance firm ap­proved by the com­mit­tee,” the re­port states.

The au­di­tor also noted that the few car log­books pre­sented for au­dit ver­i­fi­ca­tion in­di­cated that ve­hi­cles ob­tained us­ing the loans were not co-owned by the re­spec­tive bor­row­ers and the county au­thor­i­ties, hence it was not pos­si­ble to con­firm that the ve­hi­cles were bought through the pro­ceeds of the car­loan scheme and whether there ex­isted proper col­lat­eral for the amounts ad­vanced.

The au­di­tor also noted that given the monthly loan re­pay­ments due from the bor­row­ers, Sh21.7 mil­lion worth of loans were at risk of hav­ing not been col­lected at the ex­piry of the last term of the MCAS, putting the assem­bly at risk of los­ing the amount.

In Nyan­darua, the Assem­bly spent Sh23 mil­lion as daily sub­sis­tence al­lowances for MCAS and staff and hire of con­fer­ence fa­cil­i­ties for var­i­ous House com­mit­tees.

FRAN­CIS NDER­ITU | NA­TION

Au­di­tor-gen­eral Ed­ward Ouko (sec­ond left) and his coun­ter­part from S. Sudan Steven Kil­iona Wondu (sec­ond right) speak­ing to the Press yes­ter­day on the help S.sudan is re­ceiv­ing from Kenya and two other agen­cies in set­ting up an au­dit of­fice. With them is Afro­sai CEO Meisie Nkau (left) and IDI boss Ola Hoem.

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