This archive report was first published on 14 November 2019.
Auditor Flags Sh2 Billion Questionable Expenditure by Council of Governors ¶
Published on November 14, 2019, an Auditor General's report revealed that the Council of Governors (CoG) spent Sh2 billion in questionable expenses in the 2017-18 financial year.
Flagged expenditure includes legal expenses, travel, and employee compensation. The report also questioned a lending agreement between the secretariat and Cooperative Bank for Toyota Kenya to supply CoG with vehicles, as well as a staff loan fund agreement between the secretariat and Kenya Commercial Bank (KCB).
“The CoG's secretariat has over the last three financial years entered into several contracts and paid a total of Sh2,044,741,170 whose appropriation may be inappropriate,” the report stated.
CoG's lawyer failed to provide justification for Sh31.1 million paid to a lawyer representing CoG against the Senate, National Assembly, and the Independent Electoral and Boundaries Commission (IEBC). The council also faced scrutiny over intergovernmental contributions (Sh45.6 million), rent on county government liaison offices (Sh84.9 million), and Sh90 million spent on two devolution conferences.
Each of the devolved units was to contribute Sh12.5 million and Sh10 million for the two conferences. However, the secretariat received only Sh290.2 million from the counties in the financial year that ended June 30, 2018, resulting in a shortfall of Sh451.9 million.
The CoG is also said to have hired a helicopter for charter services at a cost of Sh15.3 million, but did not provide documents to prove this expense. The auditor also questioned a 105 per cent increase in employee compensation perks from Sh29.4 million in the 2015-2016 financial year to Sh60.2 million in the 2016-17 financial year.
On lending agreements, the auditor was unable to confirm the accuracy and validity of transactions involving the secretariat, Cooperative Bank, and Toyota Kenya. The audit revealed that the secretariat appointed KCB to finance employees' special housing scheme, but no documents were produced to prove that due process was followed in appointing KCB.
CoG also failed to account for rental proceeds amounting to Sh196.9 million. The council collects rent for eight floors of the Delta House building that houses its secretariat.
