Auditor flags Sh41m overdraft, legal fees at Kakamega County Assembly

Auditor General Nancy Gathungu during the launch of Audit Report on illicit Financial Flows in Africa which consist of 12 countries on 10,March, 2025 at Norfolk hotel. [Jenipher Wachie, Standard] The Office of the Auditor General has raised serious concerns over questionable financial dealings at the Kakamega County Assembly, including an unexplained bank overdraft facility and millions in unsupported legal payments. In her audit report for the 2023/2024 financial year, Auditor General Nancy Gathungu flagged an overdraft amounting to Sh37 million secured in 2022 by the county assembly management, which had accrued interest of over Sh4.3 million by February 2024 The total balance stood at Sh41,395,207. "However, the loan agreement and approvals were not provided for audit review. In the circumstances, the regularity of the overdraft facility amounting to Sh41,395,207 could not be confirmed," reads the audit report dated January 29, 2024. The report also highlighted Sh13.6 million in legal fees paid to law firms without proper documentation. According to the Auditor General, key procurement records such as approved requisitions, evaluation committee minutes, tender awards, and acceptance letters were missing. Further, there was no evidence of instructions issued to external lawyers, justification for bypassing the in-house legal department, or a breakdown of the fees paid, raising concerns over accountability in procurement and legal representation. Responding to the audit queries, County Assembly Clerk Donald Manyala acknowledged the issues raised. Still, he noted that responses had already been submitted to both the Senate and the County Assembly's Public Accounts Committee (PAC). On the overdraft facility, Manyala said it was initiated by the previous leadership as a stop-gap measure to cover staff salaries. "The matter is under active investigation by the Ethics and Anti-Corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI), although the process has dragged on for long," he said. He disclosed that disciplinary action had already been taken against some staff members linked to the matter. Regarding the legal fees, Manyala attributed the flagged payments to the initial unavailability of a framework agreement document, which he says has since been submitted to the relevant oversight bodies. "We have a lean legal team with only two officers who are overwhelmed. They cannot handle both litigation and legislation efficiently. That's why we outsourced legal services to ensure operations are not stalled," he said. The Auditor General also raised concerns over the county assembly's failure to comply with the National Cohesion and Integration Commission (NCIC) Act, 2008, which requires inclusivity in public service. The report noted that 98 per cent of the staff were from one ethnic community. Manyala, however, dismissed the concern, saying the law predated the 2010 Constitution and the advent of devolution. "That Act was meant to address ethnic conflict after the 2007/2008 post-election violence. It doesn't reflect the realities of devolved units, where local staffing is a norm," he said. "All 47 counties are largely localised in their staffing due to geographical and cultural dynamics. This shouldn't be a burden on accounting officers." He emphasised that the assembly was working to address audit concerns and had put in place systems to enhance compliance and accountability going forward. "We are committed to ensuring these issues do not recur," he said.

Auditor flags Sh41m overdraft, legal fees at Kakamega County Assembly

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Auditor flags Sh41m overdraft, legal fees at Kakamega County Assembly

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