Transition Authority: Kenyan counties inherited Sh143b

NAIROBI: County governments inherited current assets worth over Sh143 billion, including cash, from defunct local authorities in 2013, an audit by Transition Authority (TA) shows.

The 175 local authorities which ceased to exist after the 2013 General Election, also had accumulated over Sh62 billion as liabilities.

The audit also found that the authorities, collectively, had 40,815 parcels of land, 7,741 buildings and 2,462 vehicles. The details emerged from a nationwide audit aimed at enhancing accountability from the old and new administrations.

TA has recommended a forensic audit to be carried out to determine the accuracy of debts that were found to have been sought by the defunct authorities.

"A forensic audit needs to be carried out on these liabilities to determine the authenticity and accuracy of the amounts owed," reads the TA's report in part.

TA recommends "formation of a special Bench by the Chief Justice to resolve any dispute arising from the transfer of assets and liabilities of the defunct local authorities".

Assets whose ownership is not in dispute will be handed over to the respective counties immediately.

TA said alternative dispute resolution mechanisms should be explored by the interested parties before approaching the special Bench.

In cases where the public assets under the control of the local authorities were transferred fraudulently, TA has told counties to report the claims to the relevant investigative bodies for appropriate action.

Counties will also be required to set aside sufficient funds to settle the outstanding liabilities. Such liabilities included commercial loans, unremitted statutory deductions to National Hospital Insurance Fund, Kenya Revenue Authority, National Social Security Fund, Local Authority Provident Fund, Local Authority Pensions Trust, outstanding remittances to Savings and Credit Cooperative Societies, lending institutions and union dues, unpaid salaries arrears, allowances, gratuities and retiree benefits creditors and legal fees.

"Reconciliation of amounts indicated as liabilities owed to statutory bodies and third parties with data from the affected agencies to determine the correct position as well as reconciliation with payroll data," TA said in its recommendations, which also require that counties should recalculate the actuarial deficits after comprehensive audit of payrolls to determine the correct amounts owed.