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A Senate oversight committee has put on the spot Nakuru County Government for financial misappropriation in various funds running into millions of shillings.

Senate County Public Investment and Special Funds Committee put the county administration to task to over what they termed ‘financial management incapacity’.

Revelations emerged during an inquiry of audit reports for the County’s Emergency Fund, Bursary Fund and Car Loan and Mortgage for three financial years 2019/20, 2020/21 and 2021/22, respectively.

Committee chaired by Senator Godfrey Osotsi (Vihiga) said the Bursary Fund financial report had inaccuracies in the transfers, unsupported operating expenses and unsupported scholarships and other education benefits.

Committee also accused Governor Susan Kihika of irregular payments to savings and credit cooperative societies and private companies and failing to put in place internal control systems and policies that guide the internal operations of the three funds.

This even as the committee put on the spot the county administration for withdrawing funds without approvals before spending.

Auditor General Nancy Gathungu, in her audit for the year ending June 30, 2021, states there was an expenditure of Sh16.9 million in respect of reversed beneficiary payments (cancelled cheques) in the cash book that have not been supported by way of student list or vetting reports.

“In the circumstances, the propriety of scholarship and other educational benefits expenditure totalling to Sh17.6 million could not be ascertained,” she noted.

But according to Kihika, the cancellation of cheques and reversal in the cashbook was done after the government suspended learning for unspecified period of time, adding that the committee has since resumed its duties and working on the replacement modalities.

But the response irked Senators Tabitha Mutinda (Nominated), Ledama Ole Kina (Narok), Hamida Kibwana (Nominated) and Wycliff Kisang (Elgeyo Marakwet) questioning why the county Executive cancelled the cheques.

Capacity status

“It seems you have capacity issues in the accounts department of your administration. The auditor is saying there were no supporting documents. Why did you not provide the list of students who are beneficiaries?” asked Mutinda.

Auditor further stated that the county does not have a risk management policy contrary to the provisions of Regulation 158(1) of the Public Finance Management (County Governments) Regulations, 2015.
Regulations require the Accounting Officer to ensure the devolve unit develops risk management strategies, which includes fraud prevention mechanism and internal control that builds robust business operations.

“In the absence of a risk management policy, it has not been possible to confirm whether the internal controls built within the financial and operational systems were functioning as intended during the year under review,” the report.

However, in response, Kihika told the committee that plans are underway to have policies on risk management and fraud that shall play part in follow-ups on both fraud and risk management of the bursary fund.

“It should be noted that the county government is coming up with a risk management policy whereby the policy will be cascaded to all county funds including bursary,” said Kihika.