The Makueni County government did not provide valuation and needs assessment reports and ownership documents such as title deeds for four parcels of land it bought at more than Sh5 million.
This is according to a report by Auditor General Nancy Gathungu for the 2018/2019 financial year, which says the transactions were only supported by sale agreements and allotments letters.
“Management has also not demonstrated the efforts it has taken towards securing the documents thus the ownership of the four parcels of land could not be ascertained,” Ms Gathungu says in the report.
In the year under review, the county made an irregular Sh5,000,000 payment to the Council of Governors, which the Ms Gathungu says was a breach of the law because “funding for the operations of the Council of Governors is provided for by the national government in accordance with Section 37 of the Intergovernmental Relations Act.”
The county spent Sh57,506,122 on 27 projects, 22 of which had been completed but were yet to be commissioned.
In Machakos County, a comparison of balances generated from the Integrated Financial Management Information System (Ifmis) with those reflected in the financial statements presented for audit revealed significant variances with regard to 16 accounts.
“Management did not provide reconciliations for the variances and, as a result, the accuracy, validity and completeness of the account balances, and the financial statements in whole, has not been confirmed,” the report says.
The audit also revealed excluded bank balance amounting to Sh991,164,852 held in five special purpose accounts. A further Sh10,643,135 is being held at Chase Bank that was placed under statutory receivership by the Central Bank of Kenya in 2016.
Machakos county had pending bills amounting to Sh1,194,756,796 as of June 30,2019. Some of the pending bills have been outstanding since the 2013/2014 financial year.
“No plausible explanations were provided for the failure to settle the bills in spite of the county executive reporting annual surpluses,” the audit report stated.
In the financial year 2017/2018, the county executive awarded seven contracts for the construction of modern buildings under the auspices of a project dubbed “Machakos New City”. The projects were valued at more than Sh1.3 billion and were to be completed by October 2019.
The audit reveals that Sh311,729,129 had been paid for the seven projects. Physical verification of the project sites in November 2019 revealed that none of the buildings had been completed in spite of their due dates having elapsed.
“Management have explained that the delays were mainly due to lack of sufficient funds. In view of the delays, the benefits envisaged from the Machakos New City project have not been realised. Further, the delays are likely to raise the costs of the projects due to inflationary or other causes,” audit report reads.
During the 2017/2018 financial year, the county government through the Department for Roads and Transport awarded a contract for the construction of a commercial development centre. The contract was to be executed over the course of 26 weeks to September 6, 2018. It was awarded an advance payment of Sh5,549,594. The contractor, however, did not start work on schedule after taking over the site on March 8, 2018.
Records examined during audit reveals that the contractor’s two payments certificates for Sh2,975,379 and Sh2,398,931 were paid in full without recovering the advance payment.
Audit verification and examination of the records in September 2019 revealed that the project was 15 percent complete even though its due date had elapsed for more than a year.
The county government of Kitui disclosed that pending bills amounted to Sh682,397,616. However, the approved pending bills listing and supporting payment vouchers amounted to Sh477,142,269, resulting to an unexplained variance of Sh205,255,347.
The county did not provide logbooks for 482 vehicles it owned. it also did not provide records for 59 vehicles to show their mechanical status. The audit was not able to confirm the rightful ownership of the vehicles valued at Sh310,470,960.
Included in the financial statement is expenditure on printing, advertising and information supplies and services, of which some Sh15,098,736 was paid in cash by the way of temporary imprests.
“No documentary evidence was provided for audit review to confirm whether the due procurement procedures had been adhered to,” says Ms Gathungu.
Kitui County used Sh66,863,651 to pay temporary employees in the year under review. However, there was no documentary evidence to show how the need for the temporary employees was identified and how the workers were recruited.
The audit revealed 24 bank accounts with a combined total balance of Sh141,049,010 held in various banks.
This is contrary to the provisions of Section 82(1)(b) of the Public Financial Management (County Governments) Regulations, 2015, which stipulates that all county government bank accounts, except for imprest accounts, should be maintained at the Central Bank of Kenya.
