Audit queries Nairobi's Sh6bn expenses

Nairobi County government did not produce supporting documents for the expenditure of more than Sh6 billion for the financial year ending June 2019.

This is according to the latest report by Auditor General Edward Ouko, which was released on March 20, 2019.

During the auditing, the county did not disclose an amount of Sh3,045,914,596 that was held in three different bank accounts.

In one instance, AAR Insurance Kenya Limited was paid an excess amount of Sh 652,786, 602 for staff medical insurance cover and there was no document or explanation given for the excess amount.

The audit has also revealed that Sh561,841,394 was spent on asset acquisition for the county but the county has not submitted any documentation to support the expenditure.

Similarly, Sh421,287,000 was used by the county to pay for scholarship, but the county has no supporting document or even the list of the beneficiaries.

IRREGULAR PAYMENTS

Section 104(1) of Public Finance Management Act 2012 requires the county treasury to ensure proper management and control of accounting for the finances of the county government.

Yet Nairobi’s county government ignored this requirement and irregularly paid suppliers Sh381,841,224 in cash.

It has also emerged that the county used Sh592,852,611 of taxpayers’ monies on projects which have long stalled.

Some of these projects include construction of a perimeter wall at Mji wa Huruma, rehabilitation of Gaturo road, St Martin’s Catholic church road, Ndwaru road in Dagoretti and Mother Teresa road in Ruaraka.

From the county’s current account held at Equity Bank, a total of Sh209,385,752 was withdrawn. The amount was for unspecified payment and not supported by an appropriate authority.

No supporting documents were neither provided nor a pre-numbered payment made.

MISSING RECEIPTS

The system of revenue collection in the city is that clients are advised of the exact amount they are supposed to pay.

The deposit is made to the county revenue account, upon which receipts are issued by the county revenue office after presenting bank pay-in-slips.

With all that system in place, the county executive paid a vendor Sh152,055,313 for purportedly collecting revenue for the county government. There was no justification for paying the vendor presented for audit.

The Local Authorities Integrated Financial Operations Management System showed that the county government cancelled 210 receipts worth Sh45, 364,475 without providing an explanation.

Notable is that the county did not prepare any financial statement for Nairobi City Liquor Licensing board for two consecutive years.

EXPIRED DRUGS

According to the audit report, the compensation of employees exceeded the 35 per cent limit prescribed under the law as the county spent 49.4 per cent of its total revenue towards that.

The audit also found out the health facilities stocked expired drugs since Kenya Medical Supplies Authority had failed to supply drugs due to delayed payment from the county.

Food handlers in the county were not issued medical certificate due to lack of funds to purchase laboratory commodities and certificate books.

“I have not been able to obtain sufficient audit evidence to provide a basis for audit opinion on these financial statements,” the Auditor General said.

According to Mr Ouko, the audit from Nairobi Executive was a “Disclaimer of Opinion”, meaning he was unable to review the report.