Counties lost Sh143bn property as devolution set it - Daily Nation

Gap in law made counties to lose Sh143bn property owned by defunct councils

Monday September 5 2016

Kisumu Governor Jack Ranguma gets out of one of

Kisumu Governor Jack Ranguma gets out of one of new lorries bought by his county government in 2015. Unscrupulous individuals assisted by errant officials of former local authorities took advantage of a gap in law to transfer most of the Sh143 billion worth of assets owned by the defunct councils. FILE PHOTO | TONNY OMONDI | NATION MEDIA GROUP 

By PATRICK LANG'AT
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Unscrupulous individuals assisted by errant officials of former local authorities took advantage of a gap in law to transfer most of the Sh143 billion worth of assets owned by the defunct councils, the Nation has established.

Idle land and other assets like vehicles that were owned by the former local authorities were shared out in the months preceding the 2013 general elections and after the polls as the government dragged its feet in allocating them to the counties.

“Most of these assets were in form of land that had not been surveyed and had no titles.

“The delay to audit them and hand them over to us, therefore, exposed them to unscrupulous individuals who took advantage of that,” Trans Nzoia Governor Patrick Khaemba told the Nation.

The assets were to be audited and handed over to the 47 counties by the defunct Transition Authority (TA), whose three-year term ended in March 2016 with nothing to show for the task that had been given to them.

Counties, by law, could not take over ownership of the property without the exclusive transfer from the TA, which became custodian of the government assets in the devolution period.

TA ROLE TAKEN OVER

The TA’s role was then taken over by the Intergovernmental Relations Technical Committee (IGRTC), which has similarly not moved an inch in the task.

An unaudited report by the TA showed that by March 2013, the former councils had Sh143 billion in assets and Sh62 billion in liabilities.

The assets were in the form of land (4,085 pieces), vehicles (2,462) and 7,741 buildings while the liabilities included unpaid fees and statutory remittances, among others.

Most of the buildings and vehicles are now run down and in a dilapidated state because county governments either do not have the power to renovate or use the assets, or the property is now in individuals' names and counties' hands are tied.

And although some county governments automatically took over some municipal and county council buildings as their headquarters and offices for its staff, huge chunks of land that should have been inherited by the devolved units have now been grabbed or are under individuals' names.

CONSPIRACY TO LOOT

In February, the Senate Public Investments and Accounts Committee linked the clamour to oust the TA before it completed the audit to a conspiracy to continue the looting of public property.

Former TA chairman Kinuthia Wamwangi has proposed the formation of a special task force to audit and hand over the property.

“A special task force should be formed and funded for one year to come up with 48 registers — one for each county and one for the national government. The more we delay, the more we risk national assets,” said Mr Wamwangi.

He defended the authority, saying the agency's efforts to carry out its mandate were frustrated by inadequate funding.

“We asked for Sh4 billion to do the work, and we were dismissed as dreamers. We were reduced to an administrative body and the work we did was courtesy of [the] UNDP,” said Mr Wamwangi.

The Council of Governors (CoG) has argued that counties have become squatters on land and properties that legally belong to them.

“It is unfortunate that four years into devolution, county governments are yet to fully know the number of assets and liabilities that are in their possession,” the CoG said in a statement after a full council meeting in August.

COUNTY INITIATIVE

Following the TA's failure and the IGRTC's delays in transferring the assets, Trans Nzoia took the initiative and is the first county to audit its assets.

The work was done by Josim Instantaneous Consortium, one of 30 companies that the TA had originally listed for counties to use to audit the assets and liabilities.

Governor Khaemba urged his fellow governors to use any of the 30 firms to do their own audits, saying they should not wait any longer.

But as the governors clamour to inherit the Sh143 billion worth of assets, they have shown intentions to run away from the Sh62 billion in liabilities.

“The liabilities are way too much, with some going as much as Sh2 billion for some counties,” said Governor Khaemba last week.

“If they were to shoulder all these debts, the counties themselves will go under,” he added.

The debts have accrued from statutory payments like pension, whose interest cannot be waived.

Failure to make a decision on the liabilities means that the bill will keep rising.

But Mr Wamwangi had during his time at TA warned against having counties inherit only the assets and not the liabilities.

“Governors should know that they are either successors of all assets and liabilities from the defunct local authorities or the successors of nothing,” Mr Wamwangi told the Nation then.