County governments have diverted funds earmarked for the delivery of services, failed to remit locally collected revenue and made irregular payments to contractors and employees, resulting in the loss of billions of tax dollars.
The report shows that nearly 10 years after counties began operating, financial inadequacy remains the biggest threat to decentralization.
The report, which submitted to Parliament last month shows that a number of county governments are burdened with irregular payments and procurements, are unable to keep and keep treasury books and lack asset registers.
The decentralized units, as the 2019/20 audit report shows, were also unable to complete projects within their deadlines, although they were responsible for their completion arden of shillings have received. They also recruited staff irregularly, while others did not transfer their earnings.
Some of the hardest-hit districts, according to the report, are Nairobi, Turkana, Kwale, Machakos, Narok, Migori and Kilifi, both of which failed worth billions shillings they received violated the Spending Act or even failed to prove how they spent some of the funds.
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For example, the Nairobi County Government failed to record some revenue from Mama Lucy Kibaki Hospital. The audit report shows that the district received ATS 111.38 million but paid in only ATS 104.65 million, leaving a shortfall of approximately ATS 6.73 million.
“This has not been explained. The ledger submitted for review also gave no details of the payments recorded. The county also failed to maintain a cash audit of accounting records maintained by Waithaka Technical Training College,” the report said.
The county also failed to complete projects worth about Sh6.9 billion , although he received funds from the treasury . This included roads, public works and urban development projects that either stalled or ended without reasons or explanation.
The county also awarded Shsh248.89 million worth of contracts for collection, transport and the Disposal of solid waste, but at different rates to different companies, against the law, meaning value for public funds used may not have been obtained.
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“Delayed roads accounted for Sh4.68 billion, delayed urban development projects (roads and drainage) Sh418.68 million and abandoned, suspended or terminated projects Sh1.83 billion,” says Ms. Gathungu in the report.
In Machakos, the district government spent ATS 48.48 million on procurement of building materials and automotive spare parts, with no evidence of the materials purchased
“Curiously, the stocks were not registered in the shops’ ledgers to confirm their receipt and issue for use, i.e. the ex-issues cannot be confirmed,” the report states.< /p>
Likewise, the county failed to pay over Sh2 billion in outstanding bills, some of which date back to 2013, an amount that the report said was part of staff salaries, as well as other payments for suppliers within of the district. This, Ms. Gathungu said, was detrimental to funding programs in subsequent years, as the county used most of the resources it received to pay off its debts funding their operations and investments and could discourage them from dealing with public entities,” the audit report warns.
The county has yet to explain why the $49.05 million construction of the Masii Stadium Sh and the 44.62 million Sh Mavoko Stadium stalled, despite receiving significant funding for the projects from the national government. Contracts for the two projects were awarded to a local firm in January 2019 but work has since stalled as the contractor abandoned them.
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The Turkana County Government, meanwhile, is accused of maintaining six unauthorized bank accounts with the Kenya Commercial Bank (KCB). The county also lacked a fixed assets register.
It was also found that the Department of Health had paid salaries of ATS 155.88 million to county staff in the 2013/14 financial year. However, upon verification, only Sh87.37 million was repaid to the ministry, leaving a balance of approximately Sh68.51 million.
In addition, the county paid an additional Sh11.1 million to various officials, without giving any reasons for it. The county also paid approximately Sh3 million to the Frontier Counties Development Council (FCDC) and an additional Sh6.53 million to the Council of Governors in defiance of the Intergovernmental Relations Act.
In Turkana, the county failed to complete the construction projects such as the construction of a modern business center in Lodwar, the installation of lighting in Lodwar Township, the construction of the Nakwamoru Irrigation System and the rehabilitation of the Shillings 47.1 million Kaputir Irrigation System, all amounting to hundreds of millions of shillings. p>
“The delay in the completion of the projects will affect the provision of services to residents of Turkana County and value for money may not be achieved,” the audit report states.
In Kwale, the county government is accused of paying approximately Sh121.74 million in subsistence allowances to various officials outside the treasury system.
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Also the county spent Sh245.19 million under Nation al Agriculture and Rural Inclusive Growth Project (NARIG) outside the Ifmis system granted Sh105.13 million for the construction of the governor’s residence without proof of work and failed projects valued at Sh3.59 billion despite receiving funds from the Treasury.
“Although approximately 51 percent of the 265 projects had been completed as of June 30, 2020, 154 projects, approximately 30 percent, were still in progress G arrived. About 145 projects of the planned projects were not, while 11 projects were stalled.”
“An audit carried out in November 2020 on some of the sample projects carried out in the audit year revealed the various anomalies,” adds he added of the report.
The county had also failed to complete the construction of various projects including the 18-bed hostel at Ukunda Youth Polytechnic, supply and delivery of ICT equipment for the county’s data recovery site as well as the construction of cobbled streets, market sheds, prayer rooms, public toilets and the installation of street lighting.
And in Migori, the district government was embarrassed by the irregular payment to staff of 2 Sh2. 6 billion and an additional unexplained expenditure of Sh105 million allegedly paid as salaries but with no evidence of who was paid.
The district also received payments of approximately Sh2.2 billion for the rehabilitation of the Bondo Dam in Wasweta, whose construction ha was ongoing at the time of the audit.
In Narok, the county government spent revenue of about Sh2.3 billion. This figure included 15.3 million shillings for hospital income, medicines and vaccines, among other sources.
The county also hired 101 casual workers without providing needs analysis reports, details of how the casual workers were identified and recruited, records on the work done by the casual workers, staff rationalization reports and master lists.
“In addition, the casual workers were employed continuously for more than the prescribed three months,” the report shows.
In Kilifi, the district government outstanding invoices totaling 1.2 billion shillings which showed serious anomalies. These anomalies included unbudgeted outstanding bills of Sh133 million arising from a vote whose budget had been exhausted.
Records from the Ministry of Health also showed that the Kilifi District Government had unpaid debts to the ministry totaling 157 million shillings from 2014.
The district also made deductions totaling 27 million shillings from the payroll without providing an explanation as to why the amounts were not accepted in violation of the Employment Act have been transferred to the competent authorities.