Auditor General Nancy Guthungu

Kenya’s formidable Auditor General Nancy Guthungu has put the spotlight on Nakuru County Government over massive irregularities in its expenditure of funds in the Financial Year 2022/2023.

A report from the Auditor General’s office has brought to light inaccuracies in compensation payments to employees, unexplained domestic travel and subsistence expenditure by the County Executive, inexplicable expenditure in respect of legal fees, and delays in implementing County projects.

Missing compensation

The discrepancies in employees’ compensation alone amounts to over Sh6.9 billion.
Guthugu also revealed and expenditure discrepancy of Sh1,148,662,673 arising from the difference between the payment of Sh6,901,543,528 against a payroll amount of Sh5,753,880,855.

According to the report there was a compulsory National Training Authority levy totaling Sh28,374,600 that had been wrongly classified under pension and other social security contributions.

“In the circumstances”, the report concludes, “the accuracy and completeness of compensation of employees’ amount of Sh6,901,543,528 could not be confirmed.”

Payment of salaries irregularities

Contrary to Treasury regulations Nakuru County Government also continues to pay salaries outside the Integrated Personal Payroll Data (IPPD) System, to the extent that in the Financial Year 2022/2023 of the Sh6,901,543,527 paid out, Sh75,570,008 was outside IPPD and contrary to Treasury rules that require all allocations on personnel emoluments to be backed up by the IPPD.

Off-shelf payroll system

Oddly, the County Executives payroll was processed through an off-shelf payroll system that does not record vital employee information, including Kenya Revenue authority ID numbers, date of birth, date of employment and job group or job scale details.

Without explanation, it was also found that 28 county officers continued to be employed, or at least paid, above the mandatory retirement age of 60, nor could it be explained the special skills of these officers warranted their continued employment.

In addition, two of the officers listed appeared to have very similar bank account details, again for which no explanation was forthcoming and arising from which the report says irregular payments were made.

No recruitment plans

Again, contrary to regulations, the Nakuru County Government employed 476 permanent staff along with 3,902 temporary staff but with no recruitment plans.

“It was, therefore not clear,” the report said, “not clear the criteria used to identify gaps and filling of vacancies. This was contrary to paragraph B.2 of the Human Resource Policies and Procedures Manual for the Public Service, which requires every public entity 301 to prepare Human Resource Plans to support the achievement of goals and objectives in their strategic plans. In the circumstance, management was in breach of the law.”

‘Legal’ services?

If the anomalies of the County’s employment and payroll were glaring, it’s procurement of, and payment for legal services begged belief.

The Auditor General’s report found payment of Sh116,058,352 to external law firms in the way of legal fees, including the direct procurement of legal firms, for which there was no evidence of approval, signed contracts, itemized accounts of the legal charges paid, or records of reports submitted to the Public Procurement Regulatory Authority.

Improper medical supplies purchases

The Nakuru County Government, the report revealed, also purchased drugs and non-pharmaceutical medical items to the value of Sh525, 102,285 from private suppliers in contravention of Section of the Kenya Medical Supplies Authority (KEMSA) Act, 2013 which requires County Governments to purchase drugs and medical supplies from KEMSA.

Finally, there was also the slight matter of the Sh88,900,400 in pension deductions that were not remitted.