Senators have raised concerns over undisclosed legal pending bills in counties amounting to billions of shillings.
An interim report by the Senate County Public Accounts Committee has painted a grim picture of undisclosed contingent liabilities running into billions in legal fees.
It adds that the county governments run the risk of being declared insolvent should the law firms insist on settlement of the outstanding fees.
County governments have been opting to outsource legal services instead of utilising the office of the county attorney or exploring alternate dispute resolution.
Nairobi, Machakos and Uasin Gishu are some of the biggest culprits, with a combined total of about Sh30 billion in legal pending bills.
City Hall is grappling with at least Sh21 billion in outstanding legal fees after outsourcing more than 50 external law firms to represent it in various cases as its county attorney office remains understaffed.
Uasin Gishu has more than 886 pending court cases, according to Auditor-General Nancy Gathungu. However, the county government has been under-declaring pending cases, disclosing only 42 cases amounting to Sh103 million.
“This is a potential liability running into billions of shillings which if you (county government) lose can potentially render Uasin Gishu bankrupt,” said committee chairperson Senator Moses Kajwang’ (Homa Bay).
In Machakos County, the Governor Wavinya Ndeti-led administration is grappling with more than 400 court cases worth at least Sh1.1 billion. Interestingly, the county government paid Sh408 million to only two law firms in the financial year ended June 2021.
“Some of these insane legal fees sometimes are not disclosed as pending bills. If all the counties were to settle all their legal liabilities, they would have to be disbanded. Pending legal fees seems to be the greatest financial threat currently facing counties,” said Mr Kajwang’.
“The perpetrators of the grand theft are the big advocates. They are part of the scam and they are happy to accumulate the interest on the fees. We have for long focused more on human resources issues instead of billions expended on legal fees,” he added.
The report also flagged the counties for breaching the law on the size of wage bills, with almost all the counties in violation.
For instance, in the last quarter, the committee wrote to seven counties to explain the measures they have taken to reduce their wage bill to the recommended 35 per cent threshold.
The committee also observed that some counties overshoot project budgets or make payments for projects not completed. Such projects include county headquarters, assembly chambers and offices and county State officers’ residences.
“... we have directed the Controller of Budget to stop the release of funds meant for such construction,” said the committee’s vice-chairperson and Nandi Senator Samson Cherargei.
