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Council of Governors taken to task over Sh2 billion expenditure

By Wilfred Ayaga | November 13th 2019
By Wilfred Ayaga | November 13th 2019
Council of Governors Chairman Wycliffe Oparanya with Kajiado Governor Joseph ole lenku (left) and Kisumu’s Anyang’ Nyong’o  in Nakuru. [Harun Wathari, Standard]

NAIROBI, KENYA: The Auditor General has questioned the expenditure of Sh2 billion spent by the Council of Governor’s (COG).

Among the expenditure includes legal expenses, travel, and subsistence and employee compensation.

Others are bank guarantees between the secretariat and the cooperative Bank to Toyota Kenya as well as a loan fund agreement between the secretariat and Kenya Commercial Bank (KCB).

The contracts were entered although the Intergovernmental Relations Act 2012 does not recognize the existence and function of the secretariat.

The law only allows the technical committee to employ officers and staff for its secretariat as necessary for the proper discharge of the functions of the committee, the council of governors and the summit.

The audit report reads, "The council of governor’s secretariat has over the last three financial years entered several contracts and paid a total of Sh 2, 044, 741, 170 whose appropriation may be inappropriate.”

The audit discovered Sh 31.1 million paid to a lawyer representing COG against the senate, National Assembly and the Independent Electoral and Boundaries Commission (IEBC).

The COG failed to justify the expense.

Also coming under focus are intergovernmental contributions (Sh 45.6 million), rent on county government liaison offices (Sh 84.9 million) and Sh 90 million spent on the devolution intergovernmental conferences.

Each of the devolved units was to contribute Sh12.5 million and Sh10 million towards the two meetings.

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

The COG also hired a helicopter for charter services at a cost of Sh15.3 million but did not provide documents for audit.

The auditor also questioned a 105 per cent increase in employee compensation from Sh 29.4 million in 2015/2016 financial year to Sh 60.2 million in the 2016/2017 financial. This happened after the secretariat recruited and promoted employees in various categories.

The auditors say this was done without consulting the Salaries and Remuneration Commission (SRC).

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

In another case, the secretariat appointed Kenya commercial bank as the financier to employees’ special housing scheme, but there was no document to show that due process was followed.

It also failed to account for rental proceeds amounting to Sh196.9 million rental relating to eight floors of the Delta House building that houses the secretariat.

On the appointment of KCB as employees’ housing scheme, the report stated:

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

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