Payroll irregularities and attempted frauds might have caused the loss of millions of shillings in Siaya County, an internal audit report has revealed.
According to the audit commissioned by the County Executive for Finance Benedict Omollo to review the internal controls in the payment processing system, attempted payroll frauds of Sh5.4 million and Sh2.5 million were detected in December 2022 and March 2023 respectively.
The 2022/2023 financial year report shows the attempted fraud involved the manipulation and introduction of fake schedules to support payments.
The report also revealed unsupported payments made from the salaries control account totalling Sh9 million.
“Salaries account is a chequeless account and the unaccounted payments could have only been made through instructions,” stated the report.
It indicated that the payments are foreign to County Treasury and Equity Bank has not provided the instructions and payment schedules to support them.
The Director of Internal Audit William Ooko in his report revealed that salaries debited to the suspense account by the bank amounted to Sh86.2 million.
“The payment was made from a chequeless salaries account and the bank has failed to provide instructions or any other form of documents to support the payment.
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On selective or irregular promotions, the audit revealed a possible financial loss of Sh10.2 million. “These promotions are deemed to be irregular because they were not supported by the minutes from the County Public Service Board (CPSB),” read the report.
According to the report, there were no minutes supporting the promotion from the acting chief executive of the CPSB.
“The audit further noted that promotion letters were not approved by the acting Director of Human Resources (HR) for implementation in the IPPD (Integrated Personnel and Payroll Database) system, ostensibly because there was no communication by the CPSB to the Directorate of HR through the County Secretary for action,” read the report.
A review of pension by-products and supporting schedules for the period revealed unsupported contributions totalling Sh180,390 in respect of voluntary contributions by some staff.
Even though voluntary gratuity contributions should be deducted from the officer’s pay, the audit noted that some voluntary gratuity contributions amounting to Sh80,000 were paid but not deducted from the officer’s pay.
However, in a statement on Monday, the County Executive for Governance Agunda Ochanda said corrective measures such as recoveries and sanctions are being conducted on irregular promotions. “On the alleged debit of Sh86.2 million, the county government is in discussion with the bank to address the issue,” said Ochanda.