In an audit published on 21 November 2018, Homa Bay County was flagged for unexplained spending, irregular transfers, stalled projects and payments tied to work that auditors said could not be verified.
The report said the county received a disclaimer of opinion, with auditors pointing to serious gaps in financial reporting and possible misuse of public funds. Among the biggest concerns was a recurrent budget figure of Shs935,259,340 that could not be reconciled with the county’s records or the Integrated Financial Management Information System (IFMIS).
Financial records did not add up ¶
Auditors said there were differences between the budget execution report drawn from IFMIS and the summary statement of comparison between budgeted and actual amounts in the financial statements. They added that management did not provide a plausible explanation for the mismatch.
The report also questioned health revenue figures. Homa Bay County said it collected Shs45,588,734 from public health operations, but auditors’ analysis of collections at health facilities showed Shs68,575,668 was received during the year under review. That left Shs22,986,934 unaccounted for.
Transfers and payments under scrutiny ¶
Another finding concerned transfers from the county’s central bank accounts to 12 department accounts held in commercial banks. From those accounts, expenditure of Shs651,144,089 was paid out by cheque. The audit said this was contrary to Section 51 of the Public Financial Management Act (County Government Regulations 2015), which requires proper authorization before public funds are spent or committed.
The report said the rules on Authority to Incur Expenditure, commonly known as AIE, were ignored. It also said the cheque payments went against government policy requiring payments to be made online through the internet banking platform.
The auditor further questioned why the chief officer omitted Facilities Improvement Expenditure from the financial statements.
Shs43 million moved to county assembly ¶
The audit said the Department of Transport and Infrastructure transferred Shs43,000,000 meant for road construction to the Homa Bay County Assembly. The report said the move breached Section 154(1) of the Public Financial Management Act, 2012, which bars unapproved transfers between county government entities and budgeted funds.
Payments for work that could not be confirmed ¶
Several contractors were also named in the report. M/s Chrisot Agencies was paid Shs3,901,903 under voucher No. 10003602 for heavy grading, gravelling patching and ditch cleaning on the Murram-Disii road, but physical verification found the work had not been done.
Pasho Limited received Shs4,594,082 through voucher No. 10003554 for ditch cleaning, gravel patching and heavy grading on the Paga-Kipasi Road. The audit said only the ditch cleaning portion, budgeted at Shs1,360,000, was done. In total, the report said Shs5,261,903 could not be confirmed.
Road project stalled after partial payments ¶
The Kadongo-Gendia road project was another major concern. Nairobi Logistics and Construction Limited was paid Shs117,653,989.94, Bridgestone Construction Company received Shs78,000,000, and Pepeta Holdings Limited was paid Shs107,189,526.
The total contract sum was Shs687,270,372.60, while the contractors had been paid Shs302,843,516, equivalent to 44 percent of the contract price. The audit said the public may not get value for money because the project had stalled.
Hospital renovation and stadium fencing questioned ¶
Nyobu Enterprises was awarded a contract in 2014/2015 to renovate the county referral hospital at a cost of Shs1111 million. According to the project implementation status report, Shs17,886,444 had been certified and paid, including Shs5 million during the year under review. The contractor had only completed the car park, the report said.
On 20 June 2016, Majano Enterprises Limited was awarded a tender for perimeter wall fencing and related works at the county stadium in Homa Bay at a cost of Shs28,228,308. The firm had been paid Shs5,856,744, but auditors said there were no receipts for verification. A visit to the stadium on 4 January 2018 found that only pillars covering half of the perimeter had been erected before the contractor abandoned the site.
Other projects and missing assets ¶
The audit also listed unsupported supply of oxygen material at Homa Bay District Hospital and unsupported supply, delivery and commissioning of a cotton processing plant in Kendu Bay.
On 5 March 2015, M/s Log Associates signed a contract with the County Government of Homa Bay and was paid Shs5,000,000 for equipment that auditors said was never delivered. When the site was checked on 9 January 2018, the purported cotton processing plant was not there and no construction site could be identified.
Beyond the projects, the county’s inventory register was also faulted. The report said Homa Bay County was not properly keeping a record of its assets, including land, buildings and vehicles inherited from the defunct county councils. It added that a Mercedes Benz donated to the governor by the Transitional Authority had vanished and could not even be traced using its registration number. Some new vehicles were also written off and sold to senior county staff at what the report described as a throwaway price.
By the end of the audit, the picture painted was one of weak controls, missing records and projects that either stalled or could not be verified on the ground.
