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An audit report has flagged suspicious expenditures, budget irregularities, diversion and misappropriation of public funds by former Governor Sospeter Ojaamong’s administration.

Report by Busia County Governance Systems Reforms Taskforce shows the county has pending bills of above Sh1.7 billion accrued because of poor planning, lack of matching funds from own source, failure to meet revenue targets and poor financial controls that led to funds diversion.

The taskforce was appointed in September by Governor Paul Otuoma. It was tasked with conducting audit of the financial operations, including evaluation and assessment of the county Human Resource Establishment and Revenue Administration with emphasis on the last financial years.

“The expenditure analysis shows serious misuse of resources and lack of systems to ensure prudence use of resources that sees suspect payments for goods and services, double payments to contracts without proper procurement and payments for non-allowable items,” the report.

“A look at the IFMIS operations revealed poor control and supervision measures including giving user rights to all accountants in other departments other than IFMIS staff, a sure bet for abuse,” it adds.

According to the taskforce, travel and accommodation budget items are the most abused by county staff, where in some cases staff can hold up to several imprests without accounting and some being paid even when doing duties at the working stations.

Taskforce was chaired by Deputy Governor Arthur Odera, with other members being former Butula MP Michael Onyura, Patrick Odamme, Dr Charles Olang’o, Andrew Nakitare, Peter Odima, Josiah Wanyama, Bernadette Muyomi, Maureen Onyango and Dr John Meso.

Team, in its report submitted to Otuoma, has unearthed questionable transactions amounting to billions of shillings across all sectors whereas the county is currently ranked fourth poorest in the country with an alarming high poverty index.

Report reveals that in the Financial Year 2021/22, personnel emoluments amounting to Sh109.86 million were processed through the manual payroll accounting for 3.5 per cent of the total payroll cost, stating that the transactions are prone to abuse, pointing to possible misappropriation of funds by some county staff due to lack of proper internal controls.

It further reveals that an analysis of the sample development payment schedules extracts provided from IFMIS for the FY ended June 30, 2022 indicates that several unrelated payments were made under the code 3110401 -(Pre-Feasibilities, Feasibility and Appraisal Studies) and 3111401- (Other Development Projects) as per the uploaded IFMIS ledger.

“Under the same codes, payments were made that related to supplies and services for hospitality, fuel, construction and civil works among others. This may imply double payment and doubtful payments totalling to Sh788,998,123,” the report.

Double payments

Report indicates that contractors were doubling up as having carried out both feasibility studies and contract execution contrary to Section 130 of Public Procurement and Assets Disposal Act, 2015.

Cases of double payments to suppliers through cheques on different dates were identified and for instance, cheque No. 45124 for Sh2,622,000 was paid to Destiny World on January, 17, 2022 as well as on November 30, 2021 giving a total Sh 5,244,000.

It was also noted that an irregular payment of Sh3,754,137.95 was made to Breeze, a hotel in Busia Town on January,17, 2022 through cheque No. 41428 indicating that county employees were accommodated at the facility though details of the staff in question were not given for review, raising questions of misappropriation of funds. Expenditures relating to fuel, lubricants and general office supplies were also doubtful as their accuracy, eligibility and validity could not be confirmed.

The same applied to recurrent items with highest expenditure that included local travel, public participation, specialised materials and medical drugs, hospitality supplies and services, contracted professional and technical services and training.

As per the audited financial statements for 2020/21, an analysis of expenditure (under Use of Goods and Services Item) in respect to staff medical cover revealed a drop of Sh229.25 million from Sh231.8 million in 2020/21 to Sh2.55 million in 2021/22 representing a drop of 98.9 per cent.

“No explanation was provided in the financial statements to explain the abnormal drop although the actual amount of the use of goods and service costs did not drop as an aggregate when compared with the previous year’s actual expenditure,” report states.

Task force recommended that staff responsible for cases of doubtful expenditure and double payments should be held to account for the loss of public funds and such officers should step aside to allow for investigations.