How revenue loopholes cost Kericho county millions of shillings

Although Kericho is endowed with rich resources, the county government only collected Sh484.2 million in revenue in the 2016/2017 financial year. 

Auditor General Robert Ouko's report for the period indicates that the county budgeted Sh515 million and had a shortfall of Sh30.7 million. 

The Auditor General observed that the deficit was due to under-invoicing of rates, un-collected rates, and rent arrears, under-collection of forest cesss and fire safety fees. 

Others are: Outdated valuation roll, under collection of timber cess, uncollected contribution in lieu of rates, undisclosed quarry cess, drop in parking fees revenue collection, under collection of housing income and housing kiosks and stalls areas. 

In the under-invoicing of rates, a review of leasehold LR No 10788 and LR No 11386, measuring approximately 1,150, revealed that the value of the two parcels of land as per the valuation roll is Sh84, 000,00.

At the rate of 1.7 per cent of the site value, the rates payable annually is Sh1, 470,000.

“However, according to the demand note dated March 1, 2017, the firm was charged Sh693, 473 resulting in unexplained under-collection of Sh776, 527," Ouko stated.

Revenue records presented for audit review indicated that the revenue collection from parking revenue streams realised a collection of Sh31.3 million in the 2016/2017 financial year. 

This represents a drop of Sh16. 8 million (35 per cent) compared to the budget amount of Sh48.1 million. 

“The basis for determining revenue from the parking stream is not clear as the parking slots are not marked. The drop in revenue was more pronounced in motorcycle stickers (boda boda) revenue streams by 80 per cent and bus park fee by 53 per cent,” said Ouko. 

The report observed that there was undisclosed quarry cess amounting to Sh1.1 million that was not disclosed.