About Sh554.3 million meant for several counties under the National Government Affirmative Action (NGAF) programme is lying idle in bank accounts, a new report shows.

Some counties had large balances in their accounts though many needy affirmative action groups needed the money, a report from Auditor General Nancy Gathungu for the 2023/2024 financial year has disclosed.

“Note 17(b) to the financial statements reflects Sh554,289,708 for unspent county balances as at 30 June, 2024,” the report says.

“This relates to funds that were not distributed to the counties in the year under review which is an indication of failure to meet the objectives of the Fund in the financial year.”

It adds: “In the circumstances, the accuracy and completeness of unspent county balances of Sh554,289,708 could not be confirmed.”

Besides cash, the report also raises concerns that some assets lay in stores for years due to lack of standard stores ledger cards used by coordinators to document items received in stores and how they are issued.

For instance, in Kitui County, 10 motorcycles that were procured in 2020/2021 were still lying in a store and no explanation was provided for the failure to distribute them. “In the circumstances, the effectiveness of internal controls on store management could not be confirmed.”

Lower allocation

The revelations came days after woman representatives who managed the fund raised concerns over the reduction of the NGAF kitty from Sh3.2 billion to Sh2.7 billion after the budget was rationalised.

The protest came after National Treasury Cabinet Secretary John Mbadi announced that the allocation to the NGAF had been reduced even as he released the remaining balance of Sh1.1 billion owed the kitty.

The report also cited loss of interest revenue from commercial banks, existence of stale cheques, non-adherence to the human resource manual on staff establishment, and gender inequality, failure to accord equal employment opportunities to people with disabilities.

Regarding stale cheques, the report shows that verification of bank reconciliations for various accounts revealed that the fund had such cheques amounting to Sh17.7 million, suggesting that the intended objectives were not achieved and thus denying services to citizens.

On loss of interest revenue from commercial banks, the report says a review of the NGAAF’s CBK bank statements revealed that Sh1.86 billion disbursed to some counties via banks did not earn interest for NGAAF, thus denying the government revenue and meaning there was no investment value.

Payroll system

The report also revealed that salaries amounting to Sh17.3 million were paid outside the Integrated Payroll and Personnel Database system but no explanation was given about the anomaly.

“In the circumstances, the effectiveness of internal controls on payroll management could not be confirmed,” the report says.

Gender inequality

The NGAF was also cited for gender inequality, with 60 male staff (or 77 percent) and 18 females (23 percent), contrary to Section B.22 (2) of the Human Resource Policies and Procedures Manual for the Public Service, 2016.

On the rule that take-home pay after deductions should not be less than one-third of basic salaries, the report revealed that several officers were earning net salaries that below that threshold.

“This was contrary to Section C.1 (3) of the Human Resource Policies and Procedures Manual for the Public Service, 2016 which requires public officers not to over-commit their salaries,” the report says.

“In the circumstances, Management was in breach of the law.”