The Auditor-General was unable to obtain appropriate evidence of Migori County expenditures in the financial year 2017/2018.
In most cases, the former Auditor-General Edward Ouko was not provided with supporting documents for the expenditures.
In other instances, the county finance officer said the documents were razed down by a fire that occurred at the county executive headquarters in September 2017.
While the auditor was analysing the payroll, he noticed the county spent Sh5.5 million on compensating 67 employees who had retired but were still on the payroll.
Further, the auditor found out that six former staff who had been dismissed were still on the payroll.
In the county’s own generated revenue, the auditor noted 108 liquor licence permit books issued to sub-counties and departments of trade were not presented for the audit.
Further, the audit revealed that Sh95,000, which was collected from one permit book, was not included in the bank statement that was presented for audit review.
PHANTOM SERVICES
The Migori County Referral Hospital lodged Sh7.3 million claims with the National Hospital Insurance Fund (NHIF) for services the hospital offered to the patients.
From the amount, the hospital claimed only Sh3.75 million was paid, the balance was not explained.
In their report to the Auditor-General, the county indicated it contracted professional services worth Sh12.4 million but they were unable to produce requisition for the services and procurement documents for audit.
In Siaya County, Mr Ouko issued a qualified opinion during his 2017/2018 audit report.
A qualified opinion means financial information provided by the county was limited in scope or there were issues about the application of generally accepted accounting principle (GAAP).
The report shows that the county did renovation works at Odera Akong’o Campus, a satellite college of Moi University.
The company was paid Sh13.9 million on April 22. But by the time of the audit, the students had been withdrawn from the satellite college.
UNREMITTED TAX
The report also revealed the institution is a national government entity and it was not clear why the county government funded the project and how they would recover the money used.
The county spent Sh8.8 million to pay for printing, advertising and information supplies, and services from an advertising company on March 20.
Although the county had obtained approval from Kenya National Highway Authority to erect billboards, there were no inspection and acceptance certificates to confirm that those billboards were erected.
The county failed to remit Sh27.6 million being withholding tax deducted from suppliers under the pending bills to the Kenya Revenue Authority.
This is contrary to the provisions of the value-added tax act, which requires withholding agents to deduct 10 per cent tax from contractors and remit it to KRA before the 10th of every month.
The report also noted the county awarded contracts for the supply of goods, services and work under the department of public works, water and environment and education amounting to Sh48.3 million to suppliers and contractors who were not among the pre-qualified list breaching the law.
The county procured receipt books and paid the supplier Sh4.1 million but there was nothing to show the books were delivered or received.
VARIANCES
The local purchase order did not disclose the serial numbers of the accounting documents, which is contrary to section 117(2) of the Public Finance Management Act of County Government.
“In the circumstances, it was not possible to confirm whether the receipt books procured were delivered and fully accounted for,” Ouko said.
The Auditor-General’s report on Homa Bay County revealed variances between the figures in the financial statements and those from the integrated financial management information system. There was an unexplained Sh7 million variance.
The county’s revenue account had a balance of Sh649 million but the closing bank balance, according to the bank statement, showed a balance of Sh500 million. The variance was not explained during the auditing.
During the financial year, Sh55 million was paid to various suppliers for a research study, project preparation, design, and supervision but there were no supporting documents to back the expenditure.
Sh22 million was transferred from one department to another contrary to section 154(1) of the public finance management Act 2012, which states that an accounting officer shall not authorise the transfer of appropriated funds to another county government entity without the authority of the County Assembly.
“The transfer breached the law and adversely affected service delivery by the departments,” Mr Ouko noted.
STALLED PROJECTS
The county, in its financial statement, reported the bank balance in four accounts as Sh594 million, but the reconciled cash book balance indicated a balance of Sh718 million. The county did not explain the difference.
An analysis of revenue collected per health facility showed that Sh40.4 million was collected by health facilities for the year under review but only Sh27.3 million was included in the financial year leaving an unexplained amount of Sh13.2 million.
Manjano Enterprises Limited was awarded a tender for construction of a perimeter wall for the county stadium and by the time of the audit, only 57 per cent of the work had been done.
The contractor had also abandoned the site even though he had been paid Sh7.1 million, according to the auditor.
There were various stalled projects in the department of health services. The Auditor-General noted the projects are way beyond their completion dates despite Sh19.2 million being paid out.
Integrated Payroll and Personnel Database (IPPD) in Kisumu County showed Sh3.13 billion was used in salaries but there was an unexplained variance Sh157 million that was captured in the financial statement.
DIVERSITY LACKING
The payroll statistics also revealed that 97 per cent of the employees were from the dominant local community contrary to National Cohesion and Integration Commission Act 2008 section 7(1), which requires that all public establishments seek to represent the diversity of the people of Kenya in the employment of staff.
The report noted the Kisumu County bank reconciliation statement for 19 accounts with a balance totalling to Sh1.4 billion was not provided for review.
Further, bank statements for six (6) bank accounts with balances totalling Sh19.8 million were not presented for review.
Under transfer from other government entitles, Sh351 million was transferred to Kisumu Level Five Hospital; however, records maintained at the hospital revealed that the executive only disbursed Sh205 million leaving unexplained variance of Sh145,849,731.
The hospital was also to receive Sh117 million as the distribution for free maternity funds between July 1, 2013 to June 30, 2017; however, only Sh90 million had been reimbursed to the hospital as on June 30, 2017, leaving an unexplained variance of Sh26 million.
Financial statement for Kisumu for the year under review indicates that the social security benefits amounted to Sh21.8 million; however, payment totalling to Sh13.9 million were not supported.