The Office of the Auditor General is a constitutional office mandated to scrutinize the use(or misuse) of County and National Governments budgetary allocations. The Audit reports are crucial as they offer insights into how public funds are spent. It tells us, the owners, whether those mandated to manage our resources make prudent use of of it or not. The report for the financial year 2017/2018 has been availed by the office of the Auditor General and we would present you the report on your Counties beginning today. We begin with Isiolo County which unfortunately the report states has several discrepancies and anomalies.
Below is the AG’s analysis on the County Executive use of public funds.
A closer look at the report shows payments of money without any proof, variances that could not be explained, irregular expenditure” and many other serious anomalies. The Auditor General has given a ”qualified opinion” on Isiolo County Executive financial statements. According to the Auditor General the County Government ”did not present its financial records in accordance with the generally acceptable accounting principles and therefore the accuracy of the statements could not be sufficiently ascertained”. The Narok Senator Hon. Ledama Ole Kina on his response to reports of County Governments said, “I sit in the Public Accounts Committee of the Senate and have had a chance to analyze the Auditor’s Reports of all 47 counties and from the look of things 80% of all Governors current and former will end up in jail.” Isiolo County is no exception as misstatement, misappropriation, wastage and diversion of funds seems to be at play.
Unexplained Expenditures and Allowances
The County Government was not able to explain the expenditure of Kshs. 455,079,767 which did not have any supporting documents for audit review. This is contrary to Regulations 99 (3), 104 (1) and 117 (3) of the PFM (County Governments) Regulations which stipulates that every entry in the accounts should be supported by a voucher containing full details, clear narrations and particulars of the item(s) to which it relates. It is therefore not possible to determine the completeness and accuracy of the Kshs. 455,079,767 spent by the County. The Financial Statement also indicates Kshs. 1,200,000 allegedly transferred to Sericho and Merti Health Centers. However, scrutiny of the bank statements for the two health facilities revealed that no money was actually received. The County Government also spent Kshs. 4,459,650 on night outs and lunch allowances. However, the expenditure was not supported with work tickets/bus tickets, invitation letters, designations and job groups of payees, program activities, attendance register and back to office reports. The validity and accuracy of the said amount could therefore not be ascertained. The County Financial Statements also revealed Kshs. 1,444,214 paid to 5 officers in salaries and allowances which was an excess of what their scales entitled them. It is very clear that the said amount is an improper use of public funds and an open disregard to the Human Resource Policies and Procedures Manual for the Public Service.
White Elephant Projects The Financial Statements revealed Kshs. 14,990,818 for construction of drainage system in Kambi Garba, Bulla Nasei and Ashraf, desilting of dry river bed along Olla Bulla, opening of drainage and gabon installation along Isiolo Secondary School and flush flood control of Ashraff village. However, a physical verification revealed that no work had been done by the contractors even though payment vouchers totaling Kshs. 14,990,818 had been prepared and included among the list of pending bills. No explanation is given as to why pending bills for work not done were included as part of pending bills. The County in the same financial year also paid Kshs. 2,750,000 to Council of Governors as office rent for liaison office. However, agreement between the landlord and the executive indicating the location, valuation report by Ministry of Housing on estimated rent to be charged, rent per month and other terms of reference.
Unexplained Revenue and Emergency Fund
The report shows an unexplained variation of Kshs. 153,432 between revenue which was invoiced and the one which was banked. The Auditor General also noted that it was not possible to ascertain the accuracy and completeness of the County generated revenue of Kshs. 114,130,920 since several receipt books were not surrendered and others were unavailable. The County also made an irregular payment of Kshs. 36,052,737 to different payees due to court orders against the County Executive which is contrary to the provisions of the law which requires that no money should be paid or used before banking to the County Exchequer Account. The County also showed Kshs. 201,669,500 spent in respect to emergency relief. The expenditure however was not supported since survey to determine the number of people affected; the date and specific venue where food was distributed was not provided for audit report. The signature of different recipients appeared to be similar and thus the authenticity of the beneficiaries could not be ascertained.
Unconfirmed Purchase of Goods and Services
A total of Kshs. 95,766,989 is included in the Financial Statements as money spent to purchase goods and services. However, the expenditures were not supported by quotations, evaluation committee minutes and stores records showing to whom the goods were issued. It is therefore not possible to confirm whether, goods and services were received and used by the County Executive. Another Kshs. 6,625,321 was included in the statements as money spent on purchase of assets. However, the assets were not supported since serial numbers to identify the assets such as laptops, and desktops, were not provided for audit review. Further, no assets register showing the number and location were provided for audit review. The County also spent a total of Kshs. 39,306,000 on hiring of motor vehicles during the said financial year. The money which is part of the pending bills cannot be supported as there is no details of journeys taken and reasons for hire of motor vehicles were provided.
Bursary Funds Unspent
The Financial Statement as of 30th June revealed a balance of Kshs. 34,151,540 held in bursary fund account. However, no explanation is given as to why the funds were not issued as bursary to students in the County contrary to PFM (County Government) Regulations 2015 which requires County to avoid accumulation of idle balances. This is a clear breach of the law as there is no value for Public Funds. It is a scandal of enormous proportion that bursary funds remain unspent when students are unable to continue with their studies due to lack of fees. The County appears to lack priorities.