The Auditor-General Edward Ouko has faulted the Nairobi City County government for failing to put in place adequate measures to collect and clear all the outstanding rates that run into billions of shillings.
Mr Ouko’s report for the 2016/17 financial year shows that by mid last year, the county had outstanding rates of Sh305.4 billion, equivalent to 99 percent of the total outstanding accounts receivables.
In the report, which was tabled by Senate Majority Whip Susan Kihika, Mr Ouko casts doubt on the county government, arguing that the likelihood that it can collect the outstanding rates from defaulters appears to be low.
This is indicative of significant impairment on the outstanding rates balance of Sh305,367,800,145 as of June 2017.
"Further analysis of the outstanding rates balance has not been made available for audit review,” Mr Ouko says.
Similarly, the report notes that the supporting schedules for wayleave fees balance of Sh752 million were not presented for audit review while a 100 percent movement of urban development debtors from Sh79.4m from June 2016 to a nil balance in last year was not explained.
The audit further established that the statement of receipts and payments reflects payments totalling Sh24.9 billion.
However, 18 expenditure items, totalling Sh7.9 billion, included in the financial statements differ with the ledger figures totalling Sh6.1 billion for the items.
“The resulting difference between the ledger and the financial statement has not been reconciled or explained and in the circumstances the accuracy of reported Sh24.9 billion cannot be confirmed,” the report says.
Again, while the statement of receipts and payments reflects an expenditure of Sh1.7 billion in respect of acquisition of assets, a comparison of the balance presented against the Integrated Financial Management Information System (IFmis) payments report against the bank statements revealed that most of the payments were not reflected in the bank statements, making it hard for the accuracy of acquisition of assets.
The report shows that the county had revenues of Sh10.9 billion, out of which Sh7.9 billion was collected through JamboPay.
But it was not clear how much JamboPay deducted from the revenue as vendor's fees, which should be 4.5 percent.