City Hall officials on the spot over Sh600m spending
City Hall, the Nairobi City County headquarters.
Top Nairobi County Government officers are facing a probe by the anti-graft agency over suspicious expenditure of close to Sh600 million in the two previous administrations between 2020 and 2022.
The Public Accounts Committee has asked the Ethics and Anti-Corruption Commission (EACC) to look into City Hall’s spending within the flagged period.
At the same time, Nairobi Governor Johnson Sakaja has told the Senate watchdog to inquire how Sh27 billion that was allocated to the defunct Nairobi Metropolitan Services (NMS) during its two-year tenure was spent.
The governor also asked the committee to examine how the NMS left the county government with over Sh15 billion pending bills.
He urged the Senate panel chaired by Homa Bay Senator Moses Kajwang to call for an audit of funds transferred to NMS as a report raised questions about how Sh11 billion was used.
“NMS, through the presidency, should account for the cumulative Sh43 billion, it should not push the liabilities to the county government. The State House Comptroller should appear before the committee to answer the questions,” said Governor Sakaja on Monday.
Kisii Senator Richard Onyonka agreed with Mr Sakaja, saying individuals linked with the NMS should take responsibility.
The committee resolved to set a day to prosecute issues to deal with operations of NMS.
"The accounting officer in the office of the presidency will have to appear before the committee to explain how Sh11 billion was used in the fiscal year ended 2021,” said Mr Kajwang'.
On other audit queries outside the NMS, the committee came face to face with damning financial dealings in the county government during the June 2021 and 2022 fiscal years.
A report by Auditor-General Nancy Gathungu during the financial year ending June 2021 fingered the county government for spending an additional Sh72 million on a staff medical insurance scheme without documents to support the payment. The money was an addition to the Sh691 million contract already awarded to the National Health Insurance Fund (NHIF).
Governor Sakaja was taken to task to provide a list of the supposed 727 new staff that necessitated the additional expenditure. However, he said that attempts to have the NHIF carry out a reconciliation to support the outlay has been futile.
The committee had asked the governor to provide the names of the individuals covered as evidence.
“How did the county government pay the additional Sh72 million over and above the contract sum without any justification? Was this money meant to cover the new employees or was it a kickback? Show us the evidence for the basis of the payment,” said Mr Kajwang’.
“When we see such expenditure which cannot be supported then we get suspicious because medical insurance is prone to abuse, with City Hall still under investigation over billions of shillings paid to AAR Insurance.”
Nairobi Chief Finance Officer Asha Abdi, however, told the committee that the question was difficult to answer because the payment was made during the previous administration.
“The expenditure looks suspect and it will be good for the EACC to be invited to look at. In the financial statement for the period under review, only Sh679 million was declared as medical insurance cost but the additional amount was not included,” said Mr Sakaja, who passed the blame to his predecessors.
Moreover, the Auditor-General questioned the expenditure of Sh75.9 million as payment for medical supplies to two companies without supporting documents.
“This is pure theft of public money and we invite the EACC to take a look at this matter,” said Mr Kajwang’.
The county government was also on the spot over Sh15.6 billion worth of voided transactions days to the August 9, 2022 General Election.
Senator Kajwang’ questioned how City Hall requested to void the transactions on August 3, 2022, close to two months after the close of the financial year and just days to the elections.
“Is this a way of stealing public funds? This is a smoking gun. We have to find out whether the voided transactions were meant to cover something,” said Mr Kajwang’.
Senator Onyonka added that the practice is rampant in the counties with his county having 672 voided transactions.
“We should get reasons for this practice. Why would someone stop the payment of Sh15.6 billion and what was it meant for? Of course the voiding is deliberate so that different people other than the approved individuals are paid,” he said.
Mr Sakaja shocked the committee when he said that when he took over, there were 2,400 Ifmis users at City Hall, a move which put at risk public funds.
