Ouko questions Nairobi's Sh318m legal fees for 12 firms

Sunday February 3 2019

Nairobi PAC Vice Chairman Moses Ogeto

Nairobi PAC Vice Chairman Moses Ogeto (Kilimani) during the grilling of Acting County Attorney David Oseko and Finance Chief Officer Stephen Mutua on legal fees, January 31, 2019. PHOTO | COLLINS OMULO | NATION MEDIA GROUP 

COLLINS OMULO
By COLLINS OMULO
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City Hall has once again been put on the spot over the Sh318.4 million in questionable payments to 12 law firms representing Nairobi.

The legal department is said to have made the payment without adequate documentary evidence.

During the 2016/17 financial year, the department’s legal costs totalled Sh645.3 million despite an approved budgetary allocation of just Sh105 million.

The cost was Sh540.26 million higher, 515 percent above the allocation for that year.

AUTHORITY

The revelation came up during a session by the county assembly's Public Accounts Committee (PAC), which arose from queries raised by Auditor General Edward Ouko.

Mr Ouko's report indicated that Sh592.4 million in legal fees was paid outside the Integrated Financial Management Information system contrary to the National Treasury directives.

“No authority for the supplementary expenditure was sought from the county assembly contrary to Section 196 (1) of the Public Finance Management Act, 2012. Consequently, the validity and propriety of legal fees for the year as disclosed in the financial statement cannot be confirmed,” it stated.

FILES

The report further revealed that Momanyi & Associates was paid Sh85 million for a 2011 case pitting the county against Edward Rukaya and two others.

Koceyo & Company Advocates was paid Sh83 million, with the county failing to produce files for audit review.

Wachira, Mburu, Mwangi & Company advocates was paid Sh32.37 million for a case between Josmass Enterprises and the county, in which the plaintiff sued for damages yet the evaluation of tenders had not been completed.

Momanyi & Associates was paid Sh8 million in another case and Koceyo over Sh20 million for two other cases.

REDUCTIONS

Prof Tom Ojienda & Associates was paid Sh20 million after filing a bill of costs in respect to a High Court Judicial Review of 2014.

This was the case even though county officials had been instructed to hold a meeting to negotiate reduction of the judgment and mode of payment.

Mr Ouko said that Rachier & Amollo Advocates was paid Sh95 million yet the judgment amount was Sh70 million.

Another questionable payment of Sh20.4 million was made to Kithi & Company Advocates and the auditor-general questioned how the county arrived at the huge fee yet it had very little to lose in the case.

Other payments were to Wachira Nderitu Ngugi and Company advocates paid Sh9 million, Munikah and Company advocates paid Sh12.5 million, and Achola Jaoko and Company advocates paid Sh7 million.

"CONDUIT"

Acting County Attorney David Oseko and Finance Chief Officer Stephen Mutua were hard-pressed by the committee chaired by Wilfred Odalo to explain how the payments were made.

The team noted that the issue has recurred for the past three financial years and sought to know why.

In 2018, the department was on the spot for spending Sh480 million over the Sh100 million budget for the 2015/16 financial year.

“It seems this is a conduit through which some people siphon public funds at the expense of Nairobi residents,” Mr Odalo on Thursday.

COURT ORDERS

Mr Oseko explained that the payments were necessitated by warrants of arrest and garnishee court orders that compelled the department to pay or risk arrests.

“The county had no option but to pay. Legal costs are very hard to budget for because you do not know when they will come," he said.

On the issue of not acting on recommendations, the attorney said that he was not aware of any since he was recently appointed and asked for more time to present documentary evidence on the payments.

Mr Oseko and Mr Mutua will face the committee again next week.

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