The Nairobi County Assembly is in the crosshairs of the office of the Auditor general over procurement irregularities and Sh14.4 million pending bills accrued without documentary support.
According to a report by the Auditor General, the assembly accumulated pending bills amounting to Sh31 million in the 2018/2019 and the 2019/2020 financial years, but only Sh16.6 million was verifiable. This means that pending bills amounting to Sh14.4 million were not eligible.
The audit showed that the assembly then proceeded to only pay Sh8.2 million of the eligible pending bills leaving an outstanding balance of Sh8.3 million as of April 30, 2021.
Interestingly, during the period under review, the National Treasury had released Sh2.43 billion to cater for the pending bills.
The report further revealed that the assembly provided pending bills transactions valued at Sh26.2 million with another Sh4.9 million in supplier circularization which is outstanding supplier credits and historical overpayments.
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The Auditor-General Nancy Gathungu also flagged procurement irregularities, noting that the assembly did not disclose Sh7.5 million transactions in the financial statements.
The report revealed that the assembly only availed supporting documents for transactions totalling Sh18 million for the special audit review.
Following the audit, the expenditure of Sh17 million on procurement was found to be above board but a balance of Sh 12.7 million was not supported with any documents from the suppliers and the assembly.
“The special audit could not confirm the completeness, presentation, and disclosure of the total pending bills amounting to Sh26 million for the County Assembly of Nairobi as of June 30, 2020, and subsequent settlement including the unsettled balance as of April 30, 2021,” states the audit report.
Ms Gathungu further took issue with the Speaker Benson Mutura-led assembly over failure to clear Sh11 million which she noted should have been paid as the first charge.
She observed that according to regulation 41(2) of the Public Finance Management Regulations, 2015, the debts should have been cleared but were still outstanding as of April 30, 2021.
Suppliers owed by the assembly include various law firms that are yet to be paid Sh6.3 million, Deloitte Consultancy Limited which is owed Sh1.26 million, Nation Media Group which is yet to be paid approximately Sh1 million as well as advocate Muthomi Karanja who is yet to receive Sh1.8 million for litigation services.
Meanwhile, the special audit report has revealed that the pending bills owed to the various suppliers were a Sh5.6 million decrease from the recorded Sh36.6 million as of June 30, 2018. The figure represented a 15 per cent decrease.
That notwithstanding, the assembly was put on the spot over a plethora of institutional irregularities including non-payment of approved pending bills, poor record-keeping and starting a new project without clearing the old ones or without appropriations and budget provisions.
It was also fingered for having a shoddy-processed and weak budgeting system where pending bills are not included in subsequent year’s budget.