Sakaja under fire over rot at City Hall
By Alvin.Mwangi, April 8, 2024Nairobi Governor Johnson Sakaja faces intense scrutiny following revelations of financial irregularities highlighted by the Auditor General Nancy Gathungu.
According to Gathungu over Sh20 billion irregular and questionable spending in Nairobi City County has been flagged off for the period ending June 2023.
She revealed what appears to be systemic failure by the county to account for spending in the report that lifts the lid on what could be a massive financial rot at City Hall.
In her report for the financial year 2022/23 for the Sakaja led administration, the report reveals expenditure not explained by the county, irregular payments and also double payment of salaries and allowances.
The report exposes the rot in the county payroll with three county employees sharing a bank account and double payments of allowances and salaries.
Gathungu indicated that three county employees have one bank account while four officers in the county are active in the payroll but have no salaries while two employees were employed on a permanent and pensionable term while they were aged above 50 years.
“Review of the payroll for the period that ended June 2023 shows that three County employees of Nairobi of ID number XXX share one bank account. Four of the county officers are also active on the payroll but do not have salaries,” the audit report stated.
“Further, payroll entry dates for employees show two officers were employed on permanent and pensionable terms while their ages were over and above 50 years,” it added.
Nairobi county inquired about a loss of Sh15,423,116 after 178 employees were paid leave allowances twice with an irregular payment of allowances under consolidated pay to 26 officers totaling to Sh17,584,187 as an allowance of basic pay, house supplementation among others.
The report also indicates that the county also paid more than Sh100 million to 459 employees for allowances that could not be determined in what could have led to loss of public money.
This is even as the county chokes in more than Sh100 billion debt, including Sh20 billion for legal fees owed to 132 advocates and several stalled projects worth Sh1.36 billion.
“In the circumstances, for the county to pay 132 advocates, it would mean that the county will need to collect its own source of revenue for a period of two years without providing any services to the public,” the report says.
A review of the report by People Daily also indicates that Nairobi county has officers who earn less than a third of the basic salary pay which contravenes Part C. 1 (3) of the Human Resources Policy and Procedure Manual for the Public Service 2016 that states that public officers shall not over commit their salaries beyond two-thirds of their basic salary.
On compliance with the Person’s Living with Disability Act 2003, out of the 13,354 employees, only 167 have been categorised as person’s living with disability which is less than five per cent as stipulated in the Act.
The county was also put on the spot over failure of remittance of National Social Security Fund (NSSF), Pay As You Earn (Paye) and National Hospital Insurance Fund (NHIF) with due totaling to Sh1,715,817,035.
Failure to remit statutory deductions on time contravenes the Income Tax Act, NHIF Act and NSSF Act which leads to the county being penalised and fined.
“Analysis of the payroll data availed for audit revealed that the county deducted PAYE, NSSF and NHIF totalling to Sh1,715,817,035. However, no evidence was submitted to indicate the deductions were remitted to the relevant authorities,” she stated.
Further, the regularity and proper management of the scholarships and bursaries in Nairobi City County cannot be confirmed.
According to the report, 47 beneficiaries of Nairobi City County Executive Scholarships and Ward Bursaries are from different counties in the country and they received a total disbursement of Sh2,504,313.
The report also revealed that a total of 25 students who are beneficiaries of the Executive scholarships and ward funds came from private primary schools which is against the law and they received a disbursement of Sh1,165,465.
“Analysis of data provided in support of disbursements indicated cases of issuance of both scholarships and ward bursaries to 683 beneficiaries totaling Sh32.03 million. Seventy-two students from other counties and private primary schools received a total of Sh2,504,313 and Sh1,165,465 respectively,” the report stated.
Gathungu revealed that the county could not be in charge of the automated revenue collection system – Nairobi Pay, triggering fears of huge losses of own source of revenue by the county.
“No records were provided for audit to show how the county engaged the vendor and the terms of service delivery which exposed the county to possible information confidentiality breach, integrity and availability of the system for service delivery,” the report says.
The Auditor General flagged massive irregularities in the acquisition of assets worth in excess of Sh566.97 million.
The report shows that payment vouchers in respect of construction of roads and civil works totaling Sh566.97 million provided for audit revealed various gaps.
They include non-compliance with procurement law, unsupported or failure to attach relevant documents in support of payments, delayed and stalled projects.
Gathungu questioned some Sh620.61 million transferred to the defunct Nairobi Metropolitan Services.
“However, no documentation was provided to confirm the outstanding payments under NMS were transferred to the county and approved for payments appropriately,” she says.
Further, the report cast doubt on payments amounting to Sh163.69 million. The payments could not be traced to bank statements.
They were also not supported with a register or ledger for the account numbers being billed and subsequently paid for were not supported with invoices and bills to authenticate the payment.
In addition, the county paid Sh60.86 million for delivery of goods such as flood lights and drainage materials.
However, the payments could not be traced to the store’s records during stores inspection carried out on October 4, last year at the electrical stores on Ladhies Road and materials stores on Nanyuki Road.
“In the circumstances, the accuracy, completeness and regularity of the payments amounting to Sh60.86 million could not be confirmed,” the report states.
The auditor also flagged irregular procurements at City Hall. They include irregular payment of Sh4.04 million which was paid for repairs and maintenance of motor vehicles without a procurement plan and requisition from the user department.
Others are irregular procurement of firefighting motor vehicle tyres at a cost of Sh7 million and purchase of oil and lubricants at a cost of Sh7.37 million, which were not supported with documents such as vouchers.
Gathungu also flagged irregular procurement of Sh14.75million of construction materials as well as procurement of vehicles and other transport equipment at a cost of Sh100 million.
Some of the tenders were dished out to contractors through restricted tendering. They include Sh344.10 million contract awarded to a firm for construction of Mama Lucy Kibaki Hospital Phase 2. Other irregular procurement of consultancy services are at a cost of Sh20 million and garbage collection services at a cost of Sh154.87 million.
Governor Sakaja’s administration now faces mounting pressure to address the concern raised by the Auditor General and restore public confidence in the county’s financial affairs.