Senators question Auditor General’s opinion on utilization of funds by county chiefs

Senators have questioned the opinions of the Auditor General on the utilization of the funds by the County Chiefs in the devolved units.

This even as Nandi Governor Stephen Sang promised radical administrative surgery among his officers after the senators unearthed capacity pitfalls of some of his staff, especially in the Finance docket.

Appearing before Senator Moses Kajwang’ led Public Accounts Committee (PAC), Sang admitted that the financial reporting standards have not been efficient, adding that there is a need to do a radical surgery to improve financial reporting.

Yesterday, the nine-member committee questioned the officers of the Auditor General about how in most cases they end up giving qualified opinions to some of the audit reports yet in a real sense they ought to give adverse opinions.

“We are persuaded that this opinion ought to have been adverse and not qualified opinion. The issues raised here have met the threshold of adverse opinion,” said Kajwang’.

In particular Senators Fatuma Dullo (Isiolo) and Richard Onyonka (Kisii) stated the Auditor General has issued qualified to the majority of counties over the years yet they qualified for adverse opinions.

“If you look at the Audit reports for various counties, you will see they have a qualified opinion yet there are serious issues in those reports. Which other threshold are you looking for before giving an adverse opinion,” Onyonka posed.

But Governor Sang remained firm that the issues of financial reporting which have been fingered in the audit report will be a thing of the past once he implements the radical surgery in his administration.

“With regards to capacity, the Treasury has always been there for us. This is a matter that I am taking for surgical administrative action,” Sang said.

In the audit report by auditor general Nancy Gathungu, the auditor flagged inaccuracies in the county’s financial books, a query that fell on the doorstep of the county finance officers.

According to the report, the county could not explain a variance of Sh471.44 million between amounts captured in the financial statements and those in the automated system – integrated financial management information system.

“In the absence of the reconciliation, the accuracy and completeness of the figures for the above account items as reflected in the financial statements for the year ended June 30, 2020, cannot be confirmed,” the report states.

The committee demanded answers from the governor on why the county failed to reconcile the figures and failed to exclusively use the automated system in its financial operations.

“As a committee, we insist that Ifmis is the single source for information,” CPAC chairman Moses Kajwang (Homa Bay) said.

The governor, through finance chief officer Hellen Kemboi, said they were unable to exclusively rely on information from IFMIS when preparing financial statements as some modules had not been activated.

As such, the county relied on data from digital banking.

But the Treasury representative maintained that the IFMIS provided for automatic reconciliation.

“I am not supposed to feel sorry for you but I feel sorry for you because you are presiding over incompetence,” Kajwang said.

Senator Samson Cherargei (Nandi) asked whether the county was facing capacity challenges.

Sang was also put to defend himself over a Ksh58 million payment made to settle interests and penalties imposed by the KRA on his administration.

Sang said that the penalty was imposed after the former regime failed to meet its obligation to the taxman.

“These are penalties and interest that accrued from 2014, 2015 and 2016. They are historical. At that time, I was a senator, not governor,” Sang said.

The county chief was defending an audit query and questions by members of the nine-member panel on Nandi incurred such a huge penalty.

According to the report, the county paid KRA Sh202 million. The payment includes Sh58 million slapped on the county as interest and penalties for defaulting on payments.

“Why did Nandi County spend Sh58 million to pay KRA as penalties and interests? Money that should have gone to development,” committee chairman Moses Kajwang (Homa Bay) posed.

But the governor defended himself, saying that his administration paid for a historical obligation that was never met by his predecessor’s administration.

“It was unfortunate. This is a historical figure. It is available but it was inherited,” the county boss said.