County used Sh3.5m to recover Sh3m

Senators have questioned a decision by the Kisumu County government to enter into a contract to pay an audit firm Sh3.5 million to investigate a Sh3 million theft.

The county engaged Deloitte and Touche to carry out a forensic audit in a bit to recover the money stolen when the county offices were broken into on March 15, 2014.

The revelations came to the fore Thursday when Governor Jack Ranguma appeared before the Senate County Public Accounts and Investment Committee in Nairobi to respond to audit queries for the 2013/2014 financial year.

The committee chaired by Prof Peter Anyang’ Nyong’o (Kisumu, ODM) also wondered why the county government preferred an audit firm to the police, given that it was not even clear that the money would be recovered.

Senators Kimani Wamatangi (Kiambu, TNA), Martha Wangari (Nominated) and Mong’are Bw’okong’o (Nyamira, Ford-K) demanded to know how the firm was identified for the contract.

“Why did you hand-pick the firm? That is a violation of the law. Can you provide minutes indicating how the firm was identified?” Mr Bw’okong’o asked.

The senators dismissed explanations by the governor that the matter was urgent and they had to engage the audit firm because it is one of the few reputable ones in the country.

He was accompanied by senior county officials.

“Theft is a crime and you could have gone to the police. Deloitte and Touche are not security experts. Entering into a contract when you pay more for a service to recover less is a flawed agreement. It is illegal.

“I am convinced that in this direct procurement there were interested parties that were set to gain from this kind of transaction,” said Ms Wangari.

The lawmakers further sought to know why some funds were not deposited into the County Revenue Fund account, as required by law.

The account was in existence during the 2013/2014 financial year.

The governor blamed the national government for failure by devolved units to deposit county funds into the authorised revenue account as stipulated by the Public Finance Management Act.

“I agree with the Auditor-General’s report that we spent money at source in violation of the law because in the initial period of devolution, money was released late to counties,” he said.

“As a county, it was critical to spend this money to deal with specific issues,” Mr Ranguma said.

The governor said funds generated from devolved functions such as health and agriculture continued being collected by the national government for more than six months, during the transition period, thus affecting the county’s financial operations.