Auditor General Edward Ouko has unearthed unaccounted expenditure running into billions with huge discrepancies and mismanagement of funds in Nairobi County.
In his latest audit report tabled at the Senate for the year ending June 30, 2017, the auditor reveals stalled projects despite huge allocations made and contractors paid.
In a well-choreographed scheme to fleece the tax payer, the auditor also reveals how the National government paid the county government millions of shillings for the free maternity services at various health facilities but at the time of review, there were shortfalls resulting in adverse service delivery.
The county collected Sh10.9 billion in the year under review compared to Sh11.2 billion own source of revenue but the audit revealed only Sh2.4 billion representing 22 per cent of revenue collected was banked in the County Revenue Fund. This means Sh8.5 billion was spent at the source contrary to the Public Finance Management Act. In the year under review, the county executive budgeted to spend Sh33.5 billion according to the combined statement of appropriation but the actual expenditure as reported in the statement was Sh24.9 billion resulting in under expenditure of Sh8.5 billion.
The amount would have equipped all county hospitals, roads refurbished and security lights installed in major informal settlements across the county. The audit also revealed that Sh592 million was paid outside the Integrated Financial Management Information System (IFMIS) for legal fees contrary to the National Treasury directive and that the paid legal fees exceeded the budgetary allocation that had been pegged at Sh105 million.
In addition, a review of the sample case files revealed that 12 files with payments to lawyers totaling Sh318 million were not adequately supported with information and documentary evidence.
In his report, Mr Ouko notes that the county government received free maternity reimbursement from the Ministry of Health amounting to Sh281 million for various hospitals since inception of the programme in the 2013-14 financial year. The cost of construction of buildings, refurbishment of buildings, construction of roads, purchase of specialised plant, equipment and machinery as used in the IFMIS varied from what the bank statements reads totaling to Sh1.5 billion.
There was also unsupported balance of acquisition of assets amounting to Sh1.76 billion, with only Sh61million being verified as paid.
According to the auditor, there was no documentary evidence of the balance of Sh1.76 billion as having been paid.
“The breakdown of the figures as per the individual ledger transactions was not provided to support consolidated amounts. The accuracy of the expenditure totaling Sh1.76 on acquisition of assets cannot therefore be confirmed,” adds the report.
The county also reallocated Sh225.5 million without the approval of the County Assembly, hence unauthorised expenditure. “Consequently, the validity of the unauthorised expenditure amounting to Sh225.5 million cannot be confirmed,” reads the audit report.
In addition, Nairobi failed to observe the third pay rule in which the staff were earning less than the minimum net pay allowed.