A special audit by the Auditor-General has revealed that pending bills in the counties amounting to Sh57.12 billion are fake and therefore ineligible for payment.
The audit shows that just about Sh51.28 billion out of the general figure of Sh108.41 pending bills in counties are genuine and worth being settled.
The report, which was tabled in the Senate last week, shows a huge discrepancy between the total figure that has consistently been captured in several reports of the Controller of Budget as at June 2018.
It is because of this huge discrepancy that the Senate’s County Public Accounts and Investments Committee (CPAIC) has summoned both the Auditor-General Edward Ouko and Controller of Budget Agnes Odhiambo for a meeting today to establish the basis of the discrepancy and explore ways of finding a solution to a matter that threatens to affect operations of the devolved units.
In her annual report for the 2017/18 financial year, Ms Odhiambo had indicated that the outstanding pending bills in the counties stood at Sh108.41 billion as at June 2018.
However the special audit revealed that the actual figure was Sh88.98 billion, indicating a difference of Sh19.42 billion.
In any case, the report shows, of the Sh88.98 billion figure, only pending bills worth Sh51.28 billion are eligible for payment, suggesting that another figure of Sh37.70 billion presented for verification was ineligible for payment because of lack documentation to support the claims or in some instances goods or services were never delivered
A total of Sh10.80 billion of the eligible pending bills were paid between June 30, 2018 and February 15, 2019, meaning that the actual outstanding balance of pending bills in counties stands at Sh40.47 billion.
Mr Ouko says the reason for ineligibility for the pending bills as at June 30, 2018 is because of lack of documentation and work or services not done or delivered.
“In addition to the audit of the pending bills statements, a compliance audit was planned and performed to express a conclusion about whether, in all material respects, the activities, pending bills transactions and information reflected in the pending bills statements are in compliance with the authorities that govern them and the public resources are applied in effective way,” Mr Ouko says in the report.
For example, in Nairobi County the total cost of the pending bills flagged by OCOB as at June 30, 2018 stood at Sh64.80 billion. However the actual pending bills presented for audit were worth Sh23.13 billion, which is a difference of Sh41.66 billion.
Of the Sh23.13 billion presented for audit, a list of Sh11.35 billion were ineligible, meaning that the actual pending bills in Nairobi County are Sh11.78 billion as at June 30, 2019.
In Mombasa, the bills flagged out by the OCOB stood at Sh3.70 billion but the actual figure presented to the special auditor was Sh5.34 billion, a difference of Sh1.64 billion. Ineligible pending bills in Mombasa stood at Sh1.80 billion, thus the eligible pending bills established by the audit amounted to Sh3.45 billion out of which Sh213 million has been paid by February this year.
While in Meru county pending bills as per the OCOB stood at Sh2.00 billion, the actual pending bills presented for audit were Sh2.26 billion. Ineligible pending bills amounted to Sh419 million meaning that the actual pending bills for the county stand at sh1.84 as at June 2019. So far only Sh315 million worth of pending bills have been paid.
In Nakuru County, the special audit revealed that pending Bills worth Sh2.08 billion are fake and that the actual figure is Sh420 million from the Sh2.37 billion contained in the OCOB report.
The cost of pending bills in Turkana county flagged by the OCOB stood at Sh633 million. However, the actual pending bills presented for Special audit stood at Sh5.66 billion, translating into a difference of Sh5.02 billion. However the audit established that Sh3.84 billion worth of bills are ineligible.