Auditor questions Sh2 billion CoG expenditure

Chairman of Council of Governors Wycliffe Oparanya (C) flanked by vice-chair Mwangi wa Iria (right) and Makueni Governor Kivutha Kibwana (left) addresses the press on September 19, 2019, at Council of Governors' office in Westlands, Nairobi, after they held Ugatuzi initiative meeting. [Edward Kiplimo,Standard]

The Council of Governors (CoG) spent Sh2 billion in questionable expenses in the 2017-18 financial year, an Auditor General's report has revealed.

Flagged expenditure includes legal expenses, travel, and employee compensation.

Also questioned is a lending agreement that the secretariat and Cooperative Bank reached for Toyota Kenya to supply CoG with vehicles, and a staff loan fund agreement between the secretariat and Kenya Commercial Bank (KCB).

“The CoG's secretariat has over the last three financial years entered into several contracts and paid a total of Sh2,044,741,170 whose appropriation may be inappropriate,” the report said.

CoG's lawyer

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The audit discovered Sh31.1 million paid to a lawyer representing CoG against the Senate, National Assembly and the Independent Electoral and Boundaries Commission (IEBC).

COG failed to provide justification for this expense.

Also coming under focus are intergovernmental contributions (Sh45.6 million), rent on county government liaison offices (Sh84.9 million) and Sh90 million spent on two devolution conferences.

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Each of the devolved units was to contribute Sh12.5 million and Sh10 million for the two conferences.

"Out of the total expected revenue of Sh681.5 million, the secretariat received Sh290.2 million only from the counties in the financial year that ended June 30, 2018 resulting in a shortfall of Sh451.9 million,” the report further states.

Hired helicopter

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The CoG is also said to have hired a helicopter for charter services at a cost of Sh15.3 million, but did not provide documents to prove this expense.

The auditor also questioned a 105 per cent increase in employee compensation perks from Sh29.4 million in the 2015-2016 financial year to Sh60.2 million in the 2016-17 financial year.

This happened after the secretariat recruited and promoted employees in various categories.

The recruitment, according to the report, was carried out without consulting the Salaries and Remuneration Commission (SRC).

On lending agreements, the auditor was unable to confirm the accuracy and validity of transactions involving the secretariat, Cooperative Bank and Toyota Kenya.

KCB's appointment

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The audit revealed that the secretariat appointed KCB to finance employees’ special housing scheme, and no documents were produced to prove that due process was followed in appointing KCB.

CoG also failed to account for rental proceeds amounting to Sh196.9 million.

The council collects rent  for eight floors of the Delta House building that houses its secretariat.

On appointment of KCB as employees’ housing scheme, the report stated: “The process of appointment of KCB as the scheme administrator was not documented to enable verification of the legality and efficiency of the process,” the report stated.

Last month, CoG chairman Wycliffe Oparanya accused some auditors of soliciting bribes in order to dish out favours when conducting audits at the counties.

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Council of GovernorsIEBCWycliffe OparanyaAuditor General